Dive Brief:
- Beginning Sept. 17, CSX will eliminate UMAX interline service on 197 origin-destination pairs with Union Pacific in Chicago, according to a customer announcement. That means shippers will be responsible for moving trailers between Union Pacific and CSX terminals using drayage services in an already tight truck market or find alternatives.
- Freight in-gated prior to Sept. 16 will be moved according to the current arrangement; freight in-gated on Sept. 17 will be moved under the new configuration. CSX will update the schedule on its website when the plan goes into effect. Under the plan, more West Coast origin freight destined for the Southeast will interchange in Memphis.
- Starting Sept. 30, CSX will adjust interline intermodal service with BNSF and will eliminate 327 other lightly used origin-destination pairs in October. The rail company ended domestic intermodal service to and from Detroit on Sept. 1.
Dive Insight:
As fall peak shipping looms, CSX continues to realign its network to support its precision scheduled railroading initiatives, and shippers will pay the price for service disruption. Major markets affected include Baltimore, Buffalo, Charleston, Columbus, Nashville, Pittsburgh, Portsmouth and Savannah.
"They notified shippers that a big chunk of interline intermodal service is going away right in the middle of peak shipping season, and that leaves shippers scrambling to rethink their supply chain on the fly as peak season begins in the hottest trucking market that we've seen in more than a decade," Kristine Kubacki, a Mizuho Securities analyst, told Supply Chain Dive.
Inbound trans-Pacific traffic is already beginning to surge for the seasonal peak, with additional volume from companies importing ahead of anticipated tariffs.
"We're seeing some pull ahead due to the tariff threat and given the strong economy shippers are asking, what is the downside to carrying a little bit more inventory while they're studying their supply chains and exposure to the tariffs," Kubacki said.
The intermodal changes were hinted at in July when CSX CEO Jim Foote told investors on an earnings call that the CSX intermodal network needed "a ton of work" and promised train design changes and terminal consolidations. CSX management has pledged to simplify the CSX "spaghetti bowl," the convoluted nest of rail lines that challenge the plan for the precision scheduled railroading initiative, launched by the late Hunter Harrison.
One piece of that plan is better integrating CSX's intermodal operations into the larger rail network rather than operating as a standalone entity as it had in the past.
