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U.S. criticizes CSX safety
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February 25, 1998: 12:14 p.m. ET
Agency review cites crew fatigue, deficiencies in hauling hazardous goods
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NEW YORK (CNNfn) - CSX Corp.'s railroad unit has cultivated an "atmosphere" that fails to make a full commitment to safety, a review by the U.S. Federal Railroad Administration said Wednesday.
The FRA launched the review of CSX Transportation Inc. (CSXT) after a series of 1997 rail incidents, including a fatality. CSX, the nation's third-largest railroad, has more than 18,500 miles of track and 28,500 employees. Based in Jacksonville, Fla., CSX operates in 20 eastern states, and in Washington, D.C. and Canada.
The FRA said its inspectors "in many areas found an atmosphere at CSXT in which field managers consistently failed to demonstrate a full commitment to safety. It was reported to FRA inspectors that CSXT front line managers emphasized train operations over safety considerations."
Some of the concerns identified by the FRA included:
- Deficiencies in hazardous materials operations
- Safety inadequacies in crew management, including extended duty days and overall fatigue for crews
- Failure to report all accidents and incidents to the FRA as required by regulations
- The need to more effectively manage signal and train operations
- Non-compliance with record-keeping provisions of alcohol and drug testing measures
In addition, the FRA said employees who did approach CSX management with safety concerns were sometimes harassed and intimidated.
The agency did have some praise for CSX, however. The FRA said that CSX already has begun to act on many of the regulator's findings and has initiated more than 250 corrective actions.
CSX (CSX) also has implemented new programs and technology and increased staffing to reduce some crew fatigue problems.
Previously, competitor Union Pacific had undergone a similar review for its own safety problems and is currently taking steps to alleviate those problems.
Word that CSX needs to rectify safety problems comes on the heels of Union Pacific's ongoing congestion struggles. Last year, Union Pacific (UNP) acquired Southern Pacific, forming the nation's largest railroad, but also creating massive bottlenecks that snarled Midwestern rail traffic, particularly at its hub in Houston.
CSX is in the midst of its own merger activity. It still is awaiting final regulatory approval for its share of Conrail Corp., which is being split up between CSX and Norfolk Southern Corp. (NSC).
Rail stocks during 1998 have been showing the strength they lacked during much of last year. But transportation analyst Stephen Klein of Standard & Poor's said investors shouldn't expect too much out of railroad firms.
Klein pointed out that the outlook for grain and coal shipments, two of rail companies' main loads, will remain tepid this year, due to reduced demand in Asia and warmer weather stateside.
"The U.S. economy is growing nicely, but it is not going to accelerate to the point at which it drives growth," among rail companies, said Klein.
Rail analyst Douglas Rockell of Furman Selz said that rail stocks are a mixed bag. "Stay in the rail sector," said Rockell. "It's a great industry. It's like all things in the market. A couple of companies have had trouble."
While mergers like Union Pacific's thus far have failed to achieve the results promised, UP's problems have opened up opportunities for other carriers. As Union Pacific's rail congestion has mounted, UP's customers have turned over their business to other firms.
Two that have benefited and are considered good buys by Rockell are Kansas City Southern Industries (KSU) and Burlington Northern Santa Fe Corp. (BNI). In January alone, Kansas City Southern's traffic was up 16 percent from a year ago and Burlington's was up 13 percent, while UP's traffic had fallen 5 percent.
-- by staff writer Randy Schultz
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