June 11, 2018: CSX Pulls Boxcars from Nationwide Pool

For decades the majority of railroads have used a shared pool of boxcars in an effort to reduce the number of empty cars being shipped and to match the empty cars with cargo closest to the unloading point.  About a year ago, however, CSX decided to pull several hundred of its boxcars from that nationwide pool. That decision has caused added strain and expense for some large shippers.
Fred Towler, the supply-chain Vice President for International Paper Company, said “This adds additional complexity and inefficiency to our system.” International Paper Co. is a Georgia based company that produces rolls of containerboard used to make boxes. They are being forced to spend additional time separating CSX boxcars from boxcars owned by other companies that are still able to be shared in the nationwide pool. Sending a CSX car to the wrong track can result in a $2,000 fee.
The decision to pull their boxcars from the nationwide pool was made because CSX felt the boxcars were not being quickly reloaded each time. Instead, they would be recalled to customers on other rail lines which caused CSX to ship empty cars back.
Michael Rutherford, Vice President of Merchandise Sales and Marketing for CSX said “The purpose of the pool is to reduce empty miles. The moment it no longer achieves that objective, it isn’t working. That’s why we pulled out.”
Lance Fritz, chief executive for Union Pacific Corp. acknowledged that frustrations can arise when a specific boxcar is being used by another railroad and the customer wants that particular one. However,  according to Mr. Fritz, ” You sacrifice a little bit for the greater good. Overwhelmingly, we like the use of pools.
Mark Sutton, Chief Executive for International Paper, said “The interconnectivity of the different railroads makes it very difficult for one to go off on a new operating model and not think it’s going to affect everyone else.”

America’s Boxcar Pool Has a Leak in CSX