Dive Brief:
- CSX announced plans to sell six line segments comprising roughly 650 miles it considers non-core properties after a detailed evaluation of each line. While the tracks are offered for sale, CSX does not expect service disruptions for shippers.
- CSX believes a third party, likely an experienced short line operator, could operate the lines more effectively. These lines may be purchased by one buyer or multiple buyers, or may not be sold at all, depending on the bids received, according to CSX. The company expects new owners to grow traffic on the lines.
- This line sale is part of the ongoing plan to shed non-essential lines and focus operations on high priority lanes as part of the late Hunter Harrison's precision scheduled railroading makeover for CSX.
Dive Insight:
This latest announcement is part of the CSX plan to review 8,000 miles of its 21,000-mile network for potential sale or lease to allow the company to reduce maintenance and operating costs while still handling the traffic generated on the feeder line network.
"CSX is reviewing every aspect of the company's network to be sure that each asset is maximized for efficiency and adds value to our company's long-term business needs," James M. Foote, president and chief executive officer, said in the line sale announcement. "We believe these efforts will identify a robust pipeline of opportunities that will deliver material value to CSX over the next several years."
Potential buyers include private equity investment firms and short line and regional railroad holding companies such as OmniTRAX, RJ Corman, Watco and Genesee & Wyoming.
The current announcement includes the following lines:
- Massena Line: Line extending north from Syracuse, New York, to Canada
- Baldwinsville Subdivision: Branch line west of Syracuse
- West Albany and Rensselaer, New York: collection of properties near Albany, New York
- Cumberland Valley: Feeder lines extending east of Corbin, Kentucky
- Eastern North Carolina: Branch lines terminating in Grangers and Plymouth
- Marietta Subdivision: Branch line extending north out of Parkersburg, West Virginia
Earlier this year, CSX put two other rail segments up for sale, the Decatur and Danville Secondary Subdivisions in western Illinois and the Tallahassee and PA Subdivisions in the Florida Panhandle, reported Logistics Management.
The company expects to net $500 million from selling surplus rail lines and another $300 million from excess real property over the next three years, officials said during the company's presentation to investors. In 2017, the company closed eight hump yards, converting them to flat switching yards, but later returned at least one yard to hump service.