Schneider moves eastern intermodal to Norfolk Southern

The News

CSX’s rail network slowed sharply for nearly 36 hours after a technology outage knocked out crew calling, yard inventory and data links to other railroads. As service came back, Schneider National said Norfolk Southern will be its primary eastern rail provider starting Jan 1.

Trackside sensors counted CSX freight traffic 46% below its 30-day average for 29 hours.
Schneider will start shifting freight to Norfolk Southern in November, CEO Jim Filter said.

The details

The outage took down the systems that run CSX’s crews and yards, while dispatching and train control stayed up. CSX said it was not a cyberattack and found no data breach. Crews had to be called by hand. Some trains did not run because their paperwork could not be generated.

CSX could not swap data with other large railroads, so interchange stopped until systems came back.
Most of CSX’s core customer-facing applications were back online within about a day and a half.
When the systems returned, sensors counted 162 CSX freight trains from midnight to 8 am, against a typical 138.
CSX spokesman Austin Staton said intermittent technical problems might continue while the railroad brings other systems back.

In the same week, Schneider said it will move its eastern intermodal freight from CSX, its main eastern railroad since 2008, to Norfolk Southern. Schneider runs its own boxes and chassis, about 26,800 containers and 23,900 chassis. Company drivers handle more than 90% of its domestic dray moves.

CEO Filter said Schneider does not break out how much of its volume runs on each railroad.
Norfolk Southern has already made track changes and facility investments to get ready for Schneider. A joint team from both companies is running the move.
Filter said its work with CPKC does not change, including service from Mexico into the Southeast and Northeast.
Schneider’s intermodal price increases are running “comfortably in the mid-single digit range,” the CEO said.

This is Schneider’s second railroad switch in four years, after it moved its western freight from BNSF to Union Pacific. Schneider signed with Union Pacific in January 2022 and finished the move on Jan 2, 2023, after its BNSF contract ran out. Filter said that last move happened mostly over the final month of the year.

“The customer reaction as we went through the UP transaction or transition was extremely favorable,” Filter said. “We won’t be coming back and using the NS transaction as an excuse for lack of volume growth,” he also said.

Norfolk Southern is also adding lanes and terminal space in the East. The railroad says the work aims to make service more reliable and cut the time drivers spend inside terminals.

It added a Cincinnati to Atlanta service and its East Edge double-stack route between the Midwest and New England.
Terminals in Ohio, Michigan, North Carolina and Illinois are getting bigger.
Atlanta, Louisville, Harrisburg, Chicago and St Louis are getting new pavement, lighting, storage and truck access.

“Customers are taking a broader view of intermodal than ever before, and we are investing ahead of that demand,” said Ed Elkins, Norfolk Southern’s chief commercial officer.

Worth noting

If Norfolk Southern’s merger with Union Pacific goes through, Schneider would ride one railroad on both of its main networks. Schneider uses Union Pacific in the West and will use Norfolk Southern in the East. CEO Filter said Schneider’s plan does not count on any merger benefits. The Surface Transportation Board’s decision is likely late in 2027.