CSX Transportation
CSX Transportation, known colloquially as simply CSX, is a Class I freight railroad company operating in the Eastern United States and the Canadian provinces of Ontario and Quebec. Operating about 21,000 route miles of track, it is the leading subsidiary of CSX Corporation, a Fortune 500 company headquartered in Jacksonville, Florida.
CSX Corporation was formed in 1980 from the merger of Chessie System and Seaboard Coast Line Industries, two holding companies that controlled railroads operating in the Eastern United States. Initially only a holding company, the subsidiaries that made up CSX Corporation completed merging in 1987. CSX Transportation formally came into existence in 1986, as the successor of Seaboard System Railroad. In 1999, CSX Transportation acquired about half of Conrail in a joint purchase with competitor Norfolk Southern Railway. In 2022, it acquired Pan Am Railways, extending its reach into northern New England.
Norfolk Southern remains CSX's chief competitor; the two share a duopoly on transcontinental freight rail lines in the east half of the US.
History
Predecessors
CSX is the result of a number of mergers among railroads operating in the eastern United States, the earliest among them the Baltimore and Ohio Railroad which formed in the 1820s. Many of the competing railroads along the east coast began merging from the 1950s onward as part of a broader trend of consolidation. An announcement from the New York Central and Pennsylvania railroads in November 1957 that they were considering combining set off discussions between the Baltimore and Ohio Railroad and the Chesapeake and Ohio Railway on a merger. Ultimately, the financially stronger C&O took control of the B&O in December 1962, though the two railroads kept their separate identities. The NYC and PRR ultimately formed Penn Central Transportation Company in 1968, which by 1970 was bankrupt.The combined C&O/B&O purchased stock in the Western Maryland Railway until it was able to take full control in February 1967, bringing a third railroad into the combined entity, which in 1973 became formally known as the Chessie System after the C&O's historic cat mascot Chessie.
While the railroads in Appalachia were merging, southern railroads Seaboard Air Line Railroad and Atlantic Coast Line Railroad decided to pursue a merger in 1960, which was authorized by the Interstate Commerce Commission in late 1963 and finally completed in 1967, forming the Seaboard Coast Line Railroad. The combined company absorbed the Piedmont and Northern Railway in 1969.
In the Midwest, the Louisville and Nashville Railroad went on an acquisition spree, splitting the Chicago and Eastern Illinois Railroad with the Missouri Pacific Railroad in 1969. This was followed in 1971 with the acquisition of the Monon Railroad, which had complained bitterly about the C&EI split. The L&N also purchased a portion of the Tennessee Central Railway in 1969. While still independent, the L&N had long standing links to the Atlantic Coast Line, and other railroads in the region began to worry about a combined L&N/SCL system.
In 1969, the Seaboard Coast Line created Seaboard Coast Line Industries as a holding company. The Seaboard Coast Line Railroad had already held some of L&N's stock, but the new holding company began buying up as much as it could find and held nearly total control of shares by 1971. With this also came control of the Clinchfield Railroad and Georgia Railroad, both of which were nominally jointly owned by SCL and L&N. The resulting railroad conglomerate began operating under the name "Family Lines".
Despite this wave of mergers, one more was yet to come—the combination of Chessie System and the Family Lines. To this end, the CSX Corporation was organized on November 14, 1978, as a future vehicle for such a merger. Chessie and SCL Industries formally applied for ICC approval of their merger plans in January 1979, causing a rapid reaction from the region's other railroads. By April, the Norfolk and Western Railway and Southern Railway unveiled their own plans for a merger. The Southern was opposed to the planned CSX merger, but soon came to terms with Chessie and SCL and dropped its objections. On November 1, 1980, following ICC approval, CSX Corporation officially came into being as the successor of Chessie System and Seaboard Coast Line Industries. In 1982, N&W and the Southern completed their merger and formed Norfolk Southern Railway, creating a competitor to CSX.
Early years
One of the first issues the new railroad grappled with was the choice of name. Chessie and SCLI leadership agreed that, as a merger of equals, neither of the existing names could be used. A call for suggestions went out to employees of both railroads, who responded with a wide variety of initialisms combining C and S in some form. At the same time, the two companies' lawyers needed a name to use as part of their proceedings with the ICC. "CSC" was chosen but belonged to a trucking company in Virginia. "CSM" was also taken. Needing some sort of identifier for the new railroad, the lawyers decided to use "CSX", and the name stuck, despite only being intended as a placeholder. In the public announcement, it was said that "CSX is singularly appropriate. C can stand for Chessie, S for Seaboard and X, the multiplication symbol, means that together we are so much more." However, an August 9, 2016, article on the Railway Age website stated that "... the 'X' was for 'Consolidated' ". A fourth letter had to be added to CSX when used as a reporting mark because reporting marks that end in X mean that the car is owned by a leasing company or private car owner. Chessie's public relations staff drafted a number of possible logos for the new railroad, but continued to strike out until it was suggested to combine the letters "C" and "S" in the shape of an X.Despite the merger in 1980, CSX was a paper railroad until 1986. In that year, Seaboard System changed its name to CSX Transportation. On April 30, 1987, the B&O merged into the C&O. With the Western Maryland having already merged into the C&O, this left the C&O as the sole operating railroad under the Chessie System banner. Finally, on August 31, 1987, C&O/Chessie System merged into CSX Transportation, bringing all of the major CSX railroads under one banner.
Conrail acquisition
Government formed Conrail began to show promise in the early 1980s, showing a profit for the first time under the leadership of L. Stanley Crane in the wake of the Staggers Rail Act. The Reagan Administration wished to privatize Conrail now that it had shown it could stand on its own and placed it for sale in 1983. While CSX expressed interest, it ultimately did not place a bid for Conrail; Norfolk Southern did, however. When the government identified NS' bid as the winner, CSX realized it faced financial peril from a combined NS/Conrail system. The railroad fiercely argued against allowing the sale to go through, even arguing that monopoly concerns precluded a Conrail sale to either NS or CSX. Despite his history in organizing the NS merger while leading the Southern Railway, Crane was a strong advocate for Conrail's independence and proposed an alternative: privatizing Conrail through an initial public offering to the general public. Crane's solution was ultimately adopted in 1987, keeping Conrail independent.This was not the end of CSX and NS interest in Conrail, and attempts by both competitors resumed in the 1990s. This time, CSX struck first, announcing a surprise deal to purchase Conrail in October 1996. NS promptly made an offer of its own and began a bidding war with CSX that was only resolved in January 1997 when the competitors struck a deal to split Conrail between them.
On June 23, 1997, CSX and Norfolk Southern Railway filed a joint application with the Surface Transportation Board for authority to purchase, divide, and operate the assets of the Conrail, which had been created in 1976 by bringing together several ailing Northeastern railway systems into a government-owned corporation. On June 6, 1998, the STB approved the CSX–NS application and set August 22, 1998, as the effective date of its decision. CSX acquired 42 percent of Conrail's assets, and NS received the remaining 58 percent. As a result of the transaction, CSX's rail operations grew to include some of the Conrail system. CSX began operating its trains on its portion of the Conrail network on June 1, 1999. CSX now serves much of the Eastern United States, with a few routes into nearby Canadian cities.
The two competitors were unwilling to give one company full control of busy industrial areas in Detroit, Philadelphia, and northern New Jersey. A compromise solution was reached by creating Conrail Shared Assets Operations, a jointly owned switching and terminal railroad which would operate in these areas on behalf of both CSX and NS.
Other acquisitions
Virginia shortline Richmond, Fredericksburg and Potomac Railroad was acquired by CSX in February 1990. The RF&P had historically been jointly owned by a number of connecting railroads through a holding company and operated as a bridge line. All of these owners except the Pennsylvania Railroad and the Southern Railway eventually became part of CSX, and the PRR stake was given up during the bankruptcy of Penn Central. This purchase added a new connection between Alexandria and Richmond, linking former B&O lines with those of C&O and Seaboard. However, the State of Virginia, which held partial ownership of the RF&P, was displeased with the merger agreement created by CSX. In particular the status of Potomac Yard, then a major classification yard in the RF&P system, was a matter of disagreement. The yard had potential for redevelopment, and as part of negotiations with the state, CSX ultimately agreed to decommission the rail yard by the time a deal was reached in October 1991 whereby CSX and the State of Virginia each purchased part of the RF&P.From the 1930s, the B&O had used part of the Pittsburgh and Lake Erie Railroad main line from McKeesport, Pennsylvania, to West Pittsburg via a trackage rights agreement. The P&LE remained healthy enough to escape inclusion in Conrail, but a severe downturn in the steel industry in the 1980s crippled the railroad. As local traffic dried up, conditions reached the point that the B&O was running as many as 20 trains per day on the P&LE main line versus just one run by the line's owner. When P&LE employees went on strike to protest a change in ownership of the railroad, the company cut maintenance and reduced its main line to one track to cut costs. This adversely affected CSX usage of the line and sparked an interest in purchasing it outright.
An initial attempt to buy out the P&LE in partnership with an employee buyout by P&LE employees in 1988 failed when negotiations between CSX and the other railroad's unions could not come to an agreement. CSX instead purchased the P&LE main line outright in 1991, leasing it back to the P&LE. The next year, CSX formed the Three Rivers Railway as a subsidiary and purchased several key P&LE lines through it. CSX did not want the entire railroad, so some lines and company assets were instead retained by the P&LE's parent company, which ultimately sold them off.