CSX announces plans to sell six ‘non-core’ rail segments

Jacksonville, Fla.-based Class I railroad carrier CSX said yesterday that it is soliciting bids on six rail segments, which it said is a component of an effort to drive asset utilization, enhance network efficiency and create long-term value.

These six rail segments, which comprise roughly 650 miles, are considered “non-core properties” by CSX, with CSX saying its decision to solicit them was based on a detailed evaluation of each line and its potential to be operated more effectively by a highly qualified, third party.

CSX said it is soliciting bids for the following properties:

• Massena Line: Line extending north from Syracuse, NY to Canada;
• Baldwinsville Subdivision: Branch line west of Syracuse, NY
• West Albany and Rensselaer, NY: Collection of properties near Albany, NY;
• Cumberland Valley: Feeder lines extending east of Corbin, KY;
• Eastern North Carolina: Branch lines terminating in Grangers and Plymouth, NC; and
• Marietta Subdivision: Branch line extending north out of Parkersburg, WV

Earlier this year, CSX put forth two rail segments for a potential transaction: the Decatur and Danville Secondary Subdivisions in western Illinois and the Tallahassee and PA Subdivisions in the Florida Panhandle, a company spokesman told LM.

“CSX is reviewing every aspect of the company’s network to be sure that each asset is maximized for efficiency and adds value to our company’s long-term business needs,” said James M. Foote, CSX president and chief executive officer, in a statement. “We believe these efforts will identify a robust pipeline of opportunities that will deliver material value to CSX over the next several years.”

CSX added that the company is committed to ensuring that local operators create continuity of service for customers as it seeks buyers with an interest in cultivating and growing traffic on these lines.

“Providing excellent service remains a priority for CSX, and no short-term impacts on customers are expected as a result of this effort,” the company said.

A report in the Jacksonville Business Journal explained that CSX is in the process of shedding various assets. And it noted that CSX Chief Administrative Officer Mark Wallace said during the railroad's investor day that the company expected to net $300 million dollars from selling surplus real estate and $500 million from selling rail lines over the next three years. The report also stated that Wallace said during the conference that his predecessors had held onto unnecessary assets for far too long.