By JIM RUTLEDGE

D.C. Correspondent

WASHINGTON, D.C. — The nation’s major rail shippers, including farm groups and food producers, blasted CSX Corp.’s lengthy service disruptions over the past several months, calling on federal regulators to demand the No. 3 U.S. railroad improve its operations immediately.

Farm trade groups, along with Cargill, Inc. and Dow Chemical, have complained to the federal Surface Transportation Board (STB) of longer transit times, inefficient railcar routings that caused missed delivery days by weeks, unreliable switching operations and poor communications with CSX customer service operators.

In a special meeting of the STB on Oct. 11, CSX CEO Hunter Harrison apologized to shippers and defended what he calls his “precision schedule railroad” plan that has apparently been the root of CSX’s service disruptions.

“If I don’t accomplish anything else today, I want to apologize to our valued shippers,” Harrison told the STB in Washington.

The STB announced in August it would conduct a public hearing, labeling it a “public listening session,” after being flooded with complaints from hundreds of CSX customers for the previous four months.

Harrison took over CSX in March and was handed a $100 million-plus compensation package. The hearing last week was the first public forum for customers to air their grievances and gave him the chance to defend his strategy.

Since mid-July, the STB has been closely monitoring CSX’s performance after widespread problems resulted when Harrison implemented dramatic changes to the railroad’s operating plan. Shortly after taking over CSX he announced a sweeping reorganization, laying off more than 2,300 workers including 1,000 managers, mothballing locomotives and closing CSX rail yards.

He also flip-flopped the way rail cars are sorted in rail yards, replacing “unit” trains that normally carry a single commodity like grain with trains to carry diverse freight. As a result of the service issues, CSX was forced to reopen one of its switching hubs last month.

Harrison told the STB, “Whatever problems we’ve had, we’ve had internally, we made some mistakes; this is not a failure of (my) precision scheduled railroad (plan).”

CSX maintains more than 21,000 miles of rail routes connecting the Midwest to the Northeast and Mid-Atlantic.

Some of the most critical complaints were made by Randy Gordon, president of the National Grain and Feed Assoc. (NGFA), who cited major shipping delays that resulted in losses of hundreds of thousands of dollars to shippers from misrouted railcars, which prevented critical grain shipments from reaching markets on time.

The NGFA represents more than 1,000 major grain, feed and processing clients who ship more than 70 percent of the county’s grains and oilseeds.

“In some cases, our members have said they simply have given up,” Gordon said, “alleging that answers provided by CSX personnel (to its members) – if and when they can access them – are opaque and vague.”

Gordon, who was one of 20 CSX customers to appear before the STB, outlined a long list of issues and concluded with a detailed list of recommendations he urged the STB to adopt to improve rail service. “We respectfully submit that the seriousness of CSX’s actions nevertheless call for more robust oversight by the Board until it’s alleviated.”

Clay Detlefsen, senior vice president of Regulatory Affairs at the National Milk Producers Federation (NMPF), told the STB, “Unfortunately, due to missing and delayed rail shipment, the feed industry has had to turn to over-the-road transportation far too often. That results in increased costs of up to $40 per ton compared to contracted arrangements with freight rail.”

John Bode, head of the Corn Refiners Assoc. (CRA), said the “abusive treatment of captive shippers by CSX has had a substantial adverse effect on the economic interests of the U.S.

“CSX service disruptions have negatively impacted the efficiency and environmental footprint of all CRA members’ operations in the CSX service area. Bulk shipment to customers who are captive to CSX service are taking longer and are less consistent when compared to a year ago,” he told regulators.

Several shippers asked the STB to force CSX to publish minutes from its weekly calls with CSX management, and to file a “flight plan” outline in advance of future system changes. They also asked CSX to scale back rail changes that have resulted in CSX shutting down critical rail hubs.

Dow’s Greg Jozwiak, its supply chain boss, urged the STB to improve its rule to expedite relief when disruptions hit shippers. “The reality is, the procedures take too long,” he said. “We need a service remedy counted in days, not weeks or months.”

Prior to the hearing, CSX urged several of its customers for whom rail service has improved to write letters of support to the STB. Wayne Farms, of Oakwood, Ga., which operates the largest start-up feed mill in the U.S. poultry industry, wrote, “Communication has been consistent and proactive from the local level to senior management. CSX represents a united front to provide us the reliable service that we expect and Wayne Farms is very satisfied and grateful for our partnership (with CSX).”

The letter was sent Oct. 3 from Glenn Smith, Wayne’s director of Feed Ingredient Procurement.

 The STB did not say when it would issue a decision as a result of the hearing.  To view a webcast of the Oct. 11 listening session, visit the STB’s website at www.stb.gov/stb/audiomee.nsf and click on the topmost link.