A top exec at Jacksonville train company CSX isn’t talking specifically about how the firm’s intermodal review might impact plans for the Carolina Connector in Rocky Mount.
At the Stephens Fall Investment Conference in New York on Tuesday, Chief Finance Officer Frank Lonegro told analysts he doesn’t want to “spill the beans” in advance of CSX’s investment conference. That event, initially scheduled for last month, has been delayed until the first quarter.
He said CSX will be more specific about its plans for intermodal at the conference. But he told analysts Tuesday that the intermodal strategy comes down to density.
“If it costs you more to create the density, then you shouldn’t artificially create the density," he said. "If, for example, we have some spotty demand in those areas where it doesn’t support a train of any magnitude, or it doesn’t support a terminal facility at a local gathering point of any magnitude, maybe we just pick it up on a merchandise train and therefore eliminate the cost on the intermodal side, so we maintain the revenue, but take some of the cost out of the equation … if it is not going to earn its keep, then that’s something we have to look hard at.”
CSX has been planning to build a $270 million intermodal terminal in Rocky Mount, equipped with mammoth cranes to move cargo between trains and trucks. The project has repeatedly been called “game-changing” by both state and local officials, and labeled a priority by CSX. But, despite that fanfare, CSX released a statement last week that it’s re-evaluating its entire intermodal strategy – including the Carolina Connector.
Jacksonville, Florida-based transportation giant CSX is planning to build an intermodal terminal in Rocky Mount - at least officials hope so. The firm has said it's re-evaluating its intermodal strategy, and that could impact the planned facility.
The company won’t say whether it’s still planning to build the facility, and local officials have told Triangle Business Journal that they are waiting for answers.
It’s not the only facility that could be in flux. Lonegro said that CSX, led by CEO Hunter Harrison, would be looking critically at its entire portfolio – and that divestments are possible, particularly in and around metros and suburban areas with high real estate values.
“I think one of the things Hunter [Harrison] brings to the table is that everything, for the right price, is for sale,” he says, noting that, “if we don’t need it from an operating perspective and it has a high real estate value, I think those are the areas where we’ll focus [divestments].”
CSX will be going through its entire network of facilities and terminals to understand which assets it doesn’t need long term, Lonegro says.
Analyst Dan Sherman of Edwards Jones says his take from the call is that CSX isn’t sure what it’s going to do yet. The firm is trying to maximize its resources and is evaluating low-density lines.
“They’re going to do what makes sense and, if you see a lot of traffic going through [CCX], then it’s not going away,” he says.
But it could be reorganized. Lonegro says repeatedly the firm plans to let density drive its investments.