Today’s Pickup: CSX CEO Harrison takes medical leave, company value drops $6B in morning trading

Good day,

CSX Corp. CEO Hunter Harrison has taken a medical leave of absence from the railroad due to complications from a recent illness, the company announced this morning. News of the leave stunned CSX investors, who immediately sold off company stock, causing a 12% drop and $6 billion loss in company value in morning trading.

Current COO James Foote will serve as acting CEO. He was named to the position in October.

“Hunter is a good friend and has been a colleague of mine for many years.  He is an icon in the industry and we pray for his speedy recovery.  I have been following the CSX story very closely since January, but did not realize just how much progress Hunter and CSX’s able team have made replicating the transformation we effected at Canadian National some years ago.  I believe that the battleship has turned, the Precision Scheduled Railroading framework has been put into place, and the Company has amassed the critical talent – through education of the internal team and supplementation with a complement of strong PSR operating veterans and a strongly supportive Board – sufficient to follow through and execute on the PSR operating plan.  Because the team has implemented a foundation consistent with Hunter’s vision, I do not see any reason to diminish our expectations concerning the pace and magnitude of our future progress.”

“The importance of Harrison’s influence is immense,” Baird Equity Research Benjamin Hartford wrote in an investor’s note. 

Harrison was named CEO this spring along with a new board of directors following a push from an activist investor. He had previously turned around struggling Canadian Pacific.

Did you know?

Following its struggles delivering packages at the start of the holiday shipping season, UPS’s on-time performance in hits ground network has dropped to 91.5%, according to research firm ShipMatrix.

Quotable:

“Mr. President, you call the shots in your administration. Please issue an executive order today and instruct DOT to give all truckers relief from this mandate for three months. Don’t implement this colossal, Obama-era mandate just a week before Christmas.”

– U.S. Rep. Brian Babin (R-TX) in a House floor speech yesterday asking President Trump to delay the ELD mandate

In other news:

S.C. port drivers vote to unionize

Truck drivers at Container Maintenance Corp. Logistics at the port of South Carolina have voted to join the Teamster. (American Shipper)

Brokers, shippers seek ELD compliant carriers

Brokers and shippers are weighing their approach to ensuring contracted carriers are in compliance with the ELD mandate. (Transport Topics)

Peloton conducts platooning test

Peloton Technology recently held a demonstration of its platooning technology with anticipation of marketing it commercially in 2018. (CCJ)

UPS says shipping back on track

After a difficult start the holiday shipping season due to larger than expected volumes, UPS says its delivery system is back to operating normally. (Bloomberg)

Equipment financing remains an attractive option

A new survey finds that companies increased their spending on equipment leases, loans and lines of credit for the seventh consecutive year. (Logistics Management)

Final Thoughts

According to UPS, it has finally recovered from early struggles delivering holiday packages, although ShipMatrix says the company’s on-time performance has dropped to 91%, which UPS disputes. Just as UPS says it has gotten back on track, we are about to hit the last-minute shopping surge that has troubled package delivery companies in recent years. Will it again this year?

Hammer down everyone!

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