CSX exec: Inland ports better supply chain efficiency

The Class I railroad says it has seen an increase in efficiency and improvement in quality of customer service since implementing scheduled railroading.    As a result of scheduled railroading, CSX has removed more than 1,100 locomotives, reduced its active rail car count by 28,000 and decreased its number of hump yards from 12 to five.
   But the Jacksonville, Fla.-based Class I railroad also saw an increase in efficiency and an improvement in the quality of its service to customers, said Arthur Adams Jr., the company’s head of marketing. Those improvements offer a variety of benefits to the 75 ports the company serves, he said.
   “We don’t view ourselves as a commodity. We truly view ourselves as a service provider,” he said at the American Association of Ports Authorities’ 12th annual Planning for Shifting Trade conference. “We are transforming our company to think more broadly about not just the rail portion that we manage, but what are the downstream and upstream partners that we interact with to bolster our performance and bolster the customers’ experience? If you don’t have service you have nothing.”
   Inland ports have helped East Coast ports absorb a growth in capacity and have created a more efficient supply chain, he said. Inland ports give ports a competitive advantage by extending their reach and offer public benefits by reducing congestion at the ports and improving market access for exports.
   Adams said Harbor Freight Tools’ $200 million expansion of its distribution site in Dillon County, S.C., created 500 jobs in the area, drove a minimum of 10,000 containers annually through the state’s ports, helped CSX fill out existing trains and reduced mileage by about 10,000 trucks annually.
   “I think one of the creative and innovative things ports have thought through is how do we create appropriate relief valves that extend our reach into the market and give us the ability to create sustainable value for our customers and alleviate congestion, create jobs, foster additional capital investment,” he said. “All of these things are represented as a result of the inland port model.” 
  Adams said CSX and ports can work together on mutually beneficial projects that will simplify the supply chain. The railroad works with stevedores and terminal operators to determine if its service aligns with the ports’ specialization and alongside port authorities on developments, he said.
   Despite geopolitical uncertainty, Adams expects CSX to continue growing.
   “We’re going to continue to focus on market differentiation … for our railroad service,” he said. “If customers can rely on predictable capacity, reliable capacity, then that means I can reduce my buffer inventory. It means I can reduce the amount of cars online. It takes time to get there, but through partnership we are creating sustainable momentum.”