Reduced CSX rail service to the General Mills plant in Buffalo could negatively affect the cereal maker's operations, two elected leaders said.
Sen. Charles Schumer and Rep. Brian Higgins said they were "distressed" to learn CSX was reducing its twice-daily service to the South Michigan Avenue plant to just once a day, and that General Mills was given "only limited warning" about the change. They outlined their concerns in a letter to the U.S. Surface Transportation Board's acting chairman, Ann D. Begeman.
"In the near term, these reductions could lead to disruptions in production; in the longer term, they could negatively impact the competitiveness and, therefore, the viability, of the plant," Schumer and Higgins wrote. The letter was copied to Florida-based CSX's president and CEO, Hunter Harrison.
The Surface Transportation Board is an independent federal agency charged by Congress with resolving railroad rate and service disputes, as well as reviewing proposed railroad mergers.
The rail service reduction was due to take effect Monday, Schumer and Higgins said. They said the cereal plant has 437 employees, and supports "hundreds more" jobs indirectly. "The plant is vital to the region's economy and it is dependent on reliable and reasonable rail service by CSX," they wrote.
Rob Doolittle, a CSX spokesman, said the railroad "has made changes to its service plan in Buffalo and across our network as the company strives to become more efficient and deliver a better service product.
"CSX and General Mills have developed a new plan to continue to meet its freight service needs at the Buffalo facility, and that plan is being implemented this week," he said. "We highly value our long-standing relationship with General Mills and we will continue to work to meet its needs in New York and at other locations across our network."
The two elected leaders urged Hegeman to do "everything in your power" to encourage CSX to maintain its twice daily service to the plant until CSX and General Mills reach an agreement, or until General Mills makes alternative shipping and logistics arrangements.
The General Mills plant makes cereal and flour. "We're working with CSX to ensure continued adequate service at all our impacted facilities, including Buffalo," said Kelsey Roemhildt, a General Mills spokeswoman. "We are pleased that public officials are communicating their concern over the service reductions by CSX nationally."
In mid October, the Surface Transportation Board held a "listening session" for CSX to outline its new operating plan and for CSX customers to share complaints about service breakdowns.
Harrison was named the CSX president and CEO earlier this year, and the railroad announced some top management changes in late October. A Bloomberg News columnist referred to Harrison as a "storied cost cutter," and a Reuters report noted that since Harrison arrived, he has closed rail yards and cut overtime pay and hundreds of jobs.
Schumer and Higgins wrote while they were "sensitive" to CSX's "internal challenges" and the fact that the railroad is undergoing operations changes, "we believe that at the very least, a temporary extension of current service until alternative arrangements can be made is a reasonable request."
If General Mills and CSX can't reach an agreement, the Minnesota-based cereal maker has the option of filing a legal challenge to the service reduction.