CSX Transportation is facing intensifying pressure from activist investors and rivals as industry consolidation accelerates and questions mount over the Jacksonville-based railroad operator’s leadership and strategy.
The debate comes as Union Pacific and Norfolk Southern pursue an $85 billion merger that would create the nation’s first coast-to-coast freight rail network, reshaping competition across North America.
Investors warn that CSX, which operates more than 20,000 miles of track across 26 states, Washington, D.C. and two Canadian provinces, risks being left behind unless it finds a partner of its own.
Ancora Holdings Group LLC, a Cleveland-based hedge fund and CSX shareholder, argues CSX must pursue a merger to boost shareholder value and has threatened a proxy fight to oust CEO Joe Hinrichs if the company fails to act.
CSX is currently the largest railroad in the eastern U.S., and investors say the operator should find a partner of its own, raising the possibility of potential talks with other railways, including its West Coast peer BNSF Railway, which in July also hired Goldman Sachs, though owner Warren Buffett of Berkshire Hathaway has downplayed any idea of a merger between CSX and BNSF.
A merger of the two, though, would create a $200-billion, coast-to-coast rail network and mark the most significant consolidation in the sector in decades.
Hinrichs, who became CEO in 2022, came to CSX after two decades at Ford Motor Co. despite having no rail experience. His Ford career ended amid an $11-billion restructuring and setbacks like the troubled Explorer SUV launch.
Since joining CSX, his leadership has centered on cultural initiatives — most notably paid sick leave and “ONE CSX,” an initiative to unify the railroad’s workforce, elevate employee engagement, and reinforce collaboration across all levels of the organization — rather than the hard-nosed operational measures that defined his predecessors.
Hinrichs has maintained that CSX has delivered “the top total shareholder returns among the publicly traded Class I railroads” since his arrival, defending his approach amid activist investor criticism.
However, the numbers tell a different story: under his watch, the operating ratio has deteriorated from 58 percent to approximately 67 percent, and total returns have lagged peers. A lower operating ratio is an indicator of how efficiently a railroad is running its business.
For the second quarter of 2025, CSX reported that its operating income of $1.28 billion decreased 11% compared to the same period in 2024.
Some investors and analysts also have questioned whether Hinrichs’ outsider background leaves him ill-suited to run a railroad at a moment when efficiency and scale are paramount.
Rail industry experts have noted that Hinrichs follows a “servant leadership” management model, one that is focused on prioritizing the growth, well-being and empowerment of employees. For example, Hinrichs often relies on surveys and listening sessions, similar to the engagement tools used by automotive companies. But some observers say “softer” types of leadership methods do not create value and could be holding CSX back.
However, the alternative to Hinrichs often floated — former CSX operations chief Jamie Boychuk — may also be controversial.
Boychuk is a protégé of Hunter Harrison, a legendary railway executive known for introducing precision scheduled railroading (PSR). While at CSX, Boychuk helped spearhead the push for PSR, a system designed to drive efficiency through tighter schedules and lower costs.
In contrast to Hinrichs’ positioning himself as a “people first” CEO, Boychuk has prioritized authority and accountability throughout his extensive railroading career.
Boychuk’s six years of service at CSX overlapped for nearly a year with that of Hinrichs. Boychuk, who Ancora has stated would be a qualified operator to replace Hinrichs, worked at CSX until 2023. While the total shareholder return (TSR) for CSX in 2023 was approximately +13.5%, after Boychuk left the company, CSX generated -5.6% TSR in 2024.
While many see Boychuk as a driver of discipline and efficiency, his return to CSX could come with baggage. For instance, PSR’s rollout under Boychuk was polarizing, say sources — shippers complained of unreliable service and reduced flexibility.
Labor unions and workforce advocates also have been vocal about railroads’ use of PSR. Critics argue it has brought longer trains, fewer inspections, and less emphasis on safety.
However, Wall Street analysts are generally supportive of PSR because it is designed to increase efficiency and profitability for railroads, which in turn benefits shareholders.
In fact, Union Pacific began transitioning to a PSR model in 2018 and has said its use of PSR has benefited the railroad by increasing efficiency and helping it manage service recovery efforts.
The proposed Union Pacific deal, which values Norfolk Southern at $85 billion after its debt is factored in, would create the first transcontinental freight rail network with approximately 50,000 miles of track across 43 states if approved by federal regulators.
U.S. Commerce Secretary Howard Lutnick has indicated early support for consolidation, saying in an interview with CNBC this summer that U.S. railway travel needs to be more efficient.
“Whether that should be through a merger or in any other way, I’ll leave that to the regulators and the overseers,” Lutnick said. “But the concept of making it more efficient to get across the country is obviously something that we applaud. How to get there, I don’t know.”
Rail experts view President Donald Trump’s recent termination of U.S. Surface Transportation Board member Robert Primus as a sign that the administration is paving the way for merger approval. Primus, a Democrat, was the only board member to oppose the merger of Canadian Pacific and Kansas City Southern railroad when it was approved in 2023.
For CSX, the leadership debate highlights a larger dilemma: how to balance efficiency, safety, labor stability, and customer trust at a time when consolidation, investor pressure, and regulatory scrutiny are all converging.
In late July, CSX began working with Goldman Sachs to evaluate strategic options in light of the broader industry consolidation, possibly reflecting an increased seriousness around its strategic positioning, according to industry watchers.
“We welcome all opportunities that would allow us to deliver value for our shareholders, drive pro-growth, and serve our customers better,” CEO Hinrichs said during the post-earnings call.
However, he stopped short of committing to any specific merger plans.
“We think there are all kinds of opportunities to work together … we’re open to talking about all those possibilities,” Hinrichs said.