CSX Corp. 'under evaluation'

11/8/2017

NORTH BALTIMORE, Ohio — An ongoing CSX Corp. review of its entire system — begun after a new chief executive officer was hired in March to shake up the company — has put the intermodal terminal in North Baltimore in its crosshairs.

While he did not specifically identify the North Baltimore terminal in his remarks during a conference call with investors this week, CSX Chief Financial Officer Frank Lonegro clearly described its function when he told investors that terminal infrastructure and the philosophy of the railroad’s intermodal operations are “under evaluation.”

The review follows CSX’s hiring of E. Hunter Harrison in March as its chief executive officer with a mandate to boost the company’s profits by slashing overhead expenses and rearranging traffic flows — as he previously did at the Canadian National and Canadian Pacific railroads.

The Northwest Ohio Intermodal Terminal, located in Wood County’s Henry Township, primarily sorts containers that both arrive and depart by train — a function that would vanish if the hub model is dropped.

Whether the terminal will remain operating as a local truck-transfer facility if the hub operation closes is unknown.

CSX has already canceled service in certain shipment “lanes” for which sorting had occurred in North Baltimore, and discontinued or diverted some of the trains that originated, or worked there.

Rob Doolittle, a CSX spokesman, issued a non-committal statement in early October.

“As part of our transition to Precision Scheduled Railroading, CSX continues to review operations across our network, including our intermodal business, to identify opportunities to operate more efficiently and improve service to customers,” Mr. Doolittle wrote. “CSX is communicating about changes directly with affected customers, employees, and other stakeholders, as they occur and will continue to do so.”

Since then, no one from the railroad has responded to several follow-up inquiries from The Blade, and Mr. Lonegro’s remarks to the investor conference were guarded as well.

“I certainly don’t want to spill the whole can of beans this morning,” he said.

During a ceremony 14 months ago touting the facility’s “green” attributes, CSX officials said the North Baltimore terminal’s local traffic had grown from 15,000 containers in or out in 2012 to between an expected 70,000 and 75,000 in 2016.

Employment at the site itself grew from 250 workers to about 350 — including contractor workers and CSX’s own employees.

A CSX presentation during the ceremony identified Whirlpool Corp., Menards, Lowes, Home Depot, Procter & Gamble, Heinz, and Campbell Soup plants and warehouses in the area as having become substantial shippers through the terminal.

But Jeff Abbott, a spokesman for Menard, Inc., said Monday his company’s use of North Baltimore is “very limited” and, if it closed, “it would not have a significant impact on our distribution network.”

Representatives of the other companies either did not respond to inquiry or declined to comment.

CSX spent $175 million to build the 500-acre facility between 2009 and 2011 in what had been open Henry Township farm fields along its Chicago-East Coast main line.

When the facility opened in early 2011, the terminal’s five massive, electrically powered gantry cranes — with two more added later — and other container-handling equipment were touted as enabling CSX to economically expand its intermodal markets.

Under Mr. Harrison — whose hiring included an $84 million payment to offset compensation he forfeited by leaving Canadian Pacific before the end of his contract there — CSX already reduced terminal operations involved in handling carload shipments moving in traditional railroad freight cars.

Those cuts include shuttering the former Conrail Stanley Yard in Lake Township and consolodating “hump” classification functions into neighboring Walbridge Yard or shifting them elsewhere. Several dozen jobs were eliminated with that move, according to CSX.

So far there has been no formal indication of any job losses at the North Baltimore terminal despite the reduction in operations there.

The Ohio Department of Job and Family Services had posted no CSX layoff notices as of Wednesday pursuant to the federal Worker Adjustment Retraining Notification Act. The WARN Act requires 60 days’ written notice to designated state agencies whenever any workplace with 100 or more workers lays off 50 people or more.

Contact David Patch at dpatch@theblade.com or 419-724-6094.