The Jacksonville, Fla.-based Class I railroad said it is consolidating its operations administration from 10 to 9 divisions and closing administrative offices at Huntington, W.Va. in response to the slow down in coal business.
The retrenchment among railroad coal divisions continued Monday with the announcement by CSX that it is consolidating its operations administration from 10 to 9 divisions and closing administrative offices at Huntington, W.Va. The administrative responsibilities will be reassigned to five adjoining divisions.
The eastern railroad said it will continue to operate trains and facilities in the Huntington region, which encompasses the Central Appalachian coal fields.
Coal volumes there have tumbled in recent years due to federal clean air regulations that have motivated utilities to find other sources of power and the lure of cheap natural gas, which is domestically abundant. Over the last four years, CSX’s coal revenues have declined $1.4 billion.
The company said it is needs to realign its resources with demand in the coal fields. The move follows the reduction of train operations at Erwin, Tenn., and the closing of mechanical shops at Corbin, Ky.
CSX last week reported uninspiring fourth quarter and full-year 2015 financial results, posting net earnings of $466 million on revenues of $2.78 billion in Q4, year-over-year decreases of 5 percent and 13 percent, respectively, thanks in part to a 32 percent drop in coal volumes for the quarter.
In addition, Norfolk Southern said last week it was consolidating two mid-Atlantic divisions and idling a port of track in West Virginia because of the decline in coal business.
CSX consolidates management divisions in face of coal decline
