CSX Corp. | Railroad Safety Committee at CSX Corp.

Status
Filed
Previous AGM date
Resolution details
Company ticker
CSX
Resolution ask
Amend board structure
ESG theme
  • Social
ESG sub-theme
  • Decent work
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Real Estate
Company HQ country
United States
Resolved clause
RESOLVED, that shareholders of CSX Corporation (the “Company”) urge the Board of Directors (the “Board”) to take the steps necessary to form a Railroad Safety Committee of independent directors with the power and duty to review staffing levels and their impact on safety at our Company’s railroad operations, and to meet and confer on safety issues with relevant stakeholders such as customers, communities, employees, and labor unions. 
Supporting statement
SUPPORTING STATEMENT
Ensuring the safety of our Company’s railroad operations is not only a collective legal and ethical responsibility, but also a vital component of maintaining the financial health and reputation of our Company. Recent derailments in the railroad industry, including those involving our Company, have drawn attention to the potential risks associated with these operations, necessitating a proactive approach to enhance safety measures.i There are over 1,000 known train derailments a year in the United States -- averaging three a day. ii
As common carriers, railroads are required by federal law to transport hazardous materials that can result in the loss of life and environmental contamination in the event of a train derailment. In 2023, the Norfolk Southern (“NS”) train derailment in East Palestine, Ohio resulted in the release of vinyl chloride that captured national media attention and publicized the need for improved railroad safety. iii The 2023 East Palestine derailment has cost NS almost $1 billion and a similar derailment at our Company could pose a significant financial risk.iv
The East Palestine train derailment has also increased scrutiny of the role of the Precision-Scheduled Railroading (“PSR”) operating model used by our Company and other Class I freight railroads to increase operating efficiency and reduce costs.vii In our view, PSR has resulted in greatly reduced staffing levels, less equipment, and longer trains, all of which have contributed to the safety issues. In 2022, Surface Transportation Board Chairman Martin Oberman stated that:
“Over the last 6 years, the Class Is collectively have reduced their work force by 29% – that is about 45,000 employees cut from the payrolls. In my view, all of this has directly contributed to where we are today – rail users experiencing serious deteriorations in rail service because, on too many parts of their networks, the railroads simply do not have a sufficient number of employees.”viii
While PSR may reduce staffing costs in the short-run, we believe that the long-term cost of increased derailments will outweigh any short-term financial gain. By establishing a Railroad Safety Committee, our Company can reduce the likelihood of derailments, protect its workforce, safeguard communities along its routes, provide better service to customers, demonstrate its commitment to ethical business practices, and enhance our Company’s long-term value.
i https://www.propublica.org/article/railroad-safety-union-pacific-csx-bnsf-trains-freight ; https://www.washingtonpost.com/transportation/2023/07/17/pennsylvania-train-derailment-evacuations/ ; https://www.timesunion.com/news/article/investigation-cleanup-continue-following-18280195.php 
ii https://www.npr.org/2023/03/09/1161921856/there-are-about-3-u-s-train-derailments-per-day-they-arent- usually-major-disaste 
iii https://www.nytimes.com/2023/02/15/us/ohio-train-derailment-anxiety.html ; https://www.nytimes.com/2023/02/17/opinion/ohio-train-derailment-safety-regulation.html 
iv https://www.cnn.com/2023/07/27/investing/norfolk-southern-east-palestine-derailment-costs/index.html 
v https://www.ntsb.gov/news/press-releases/Pages/NR20230214.aspx 
vi https://www.ntsb.gov/news/press-releases/Pages/NR20230302A.aspx 
vii https://www.wsj.com/articles/norfolk-southern-derailment-spurs-questioning-of-turnaround-kings-strategy- 5403464c 
viii https://www.stb.gov/news-communications/latest-news/pr-22-21/ 

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.