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Today’s pickup: voicing confidence at CSX; another California drayage lawsuit

Photo: Shutterstock

Good day,

We listened to the webcast Wednesday of Jim Foote, CSX CEO, speaking at the Credit Suisse Industrials conference. Foote followed in the footsteps—no pun intended—of Hunter Harrison, the father of precision railroading who died just about a year ago. As other companies are now conceding they need to follow the PSR model, it’s interesting to hear how Foote’s approach in a public forum has shifted slightly. Having listened to some earnings calls with him earlier this year, Foote then talked mostly about the ways that PSR could cut costs out of the system. And cut he did, all the way down to a sub-60 operating ratio for CSX (NYSE: CSX) in the last two quarters, well before the company’s goal to reach that level. But on Wednesday, it was more about the service. Yes, he said, we can get the trains to run on time. We’re not just interested in slashing costs; greater efficiency will bring schedules that are more reliable. And without that reliability, no matter how many costs we cut, we’re not going to thrive. He sounded like a man who thought he had won the first battles and was ready for the next act, though he also noted that the company never thought it had to just do cost-cutting and then could move on to the reliability part of the business.  

Did you know?

Jason’s Law was named after truck driver Jason Rivenburg, who was shot and killed in 2009. Rivenburg was parked for the evening in an abandoned gas station after arriving too early for a delivery in South Carolina. Forced to find a place to park, the driver found the gas station, where Willie Pelzer killed him for $7 during a robbery. Pelzer was convicted of killing Rivenburg and sentenced to life in prison. The Jason’s Law survey for 2018 has just been launched.


“We are still growing in trade. However, it has slowed down a bit. U.S. ocean trade is down strongly this month.”

–Tim Scharwath, chief executive of DHL Global Forwarding and Freight, discussing trade levels and trade war impacts on trade movements.

In other news:

Another action in the California drayage battles

And once again, it’s California Cartage at the middle of the dispute (The Daily Breeze)

Watched the men who rode you…switch from sails to steam…and back

Wind-powered ships are being studied by Renault to move cars across the ocean (The Loadstar)

Tighter rules on chains introduced in B.C.

The new regulations reduce the size of the vehicle that needs them (Global News)

Big merger in the shipping business

Diamond S and Capital Product Partners tying up (Platts)

The Canada Post strike is over, but the backlogs drag on

There are numerous estimates as to when it will lift; this one says the new year (CityNews Vancouver)

Final Thoughts

Morgan Stanley’s Truckload Freight Index—the TLFI—was all positive in its latest weekly report.  The sequential moves for dry van, reefer and flatbed were all higher from the prior week, and they were all higher versus seasonal norms. Still, the transportation team at Morgan Stanley led by Ravi Shanker were certainly not seeing that as marking any sort of significant turn. “In our previous update, we shared concerns about a one-off increase in our TLFI not being indicative of peak season showing up in the data,” Morgan Stanley said in its report. “We remain skeptical about this minor demand ‘increase’ and will continue to monitor for a further holiday boost.”

Hammer down everyone!

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.