The fast track: CSX transforms operations for 23,000-plus employees with Azure and AI

Facing a complex landscape of environmental disruptions, outdated systems, and rising customer expectations, CSX needed a scalable cloud infrastructure and generative AI capabilities to modernize operations and improve data insights and reliability.

Operating 20,000 route miles across the United States and two Canadian provinces, CSX migrated its infrastructure to Microsoft Azure, fueling scalable cloud infrastructure and generative AI solutions.

CSX maximizes the cloud solutions of Azure and AI to revolutionize rail operations, achieving real-time data streaming and analytics, reducing derailments, optimizing fuel-efficient routing, and enhancing overall operational efficiency.

CSX, a cornerstone of American transportation for nearly two centuries, is more than just a freight rail company—it’s a lifeline for the nation. Through modernization and innovation, CSX is revolutionizing how goods move across the country, shaping the way they arrive at our homes, businesses, and communities. Using cutting-edge technology, CSX is enhancing the efficiency and reliability of supply chains that underpin daily life, delivering everything from the food we eat to the clothes we wear.

Operating over 20,000 miles of rail lines across North America, CSX transports about 3.4 million carloads and 2.9 million intermodal units (TEUs) annually. However, the complexity of modern supply chains, rising customer expectations, and outdated systems posed challenges to maintaining this critical network.

Many of CSX’s previous systems were deeply interconnected and built decades ago, making it increasingly difficult to scale operations, incorporate advanced technologies, or adapt to the demands of real-time data processing and analytics. Dave Rich, Chief Architect at CSX, says, “CSX had a lot of aging infrastructure, including technical debt. Our previous systems were written decades ago, and everything was deeply intertwined.” Beyond technology, the company also faced operational challenges like weather disruptions, labor volatility, and train stoppages, which could ripple across supply chains and industries nationwide.

To address these challenges, CSX launched a bold transformation, migrating to a modernized infrastructure fueled by AI and cloud-native services.

CSX reduced latency by 89% with its migration to Azure

CSX accomplished an ambitious eight-month migration from on-premises datacenters to Microsoft Azure, laying the foundation for future innovation and agility. Steve Fortune, Chief Digital and Technology Officer at CSX, says, “Our focus was clear—we went all in on Azure. The strategy was to adopt Azure VMware Solution to quickly establish the cloud as the central hub of our data, enabling us to drive innovation and optimize operations effectively.”

“Our focus was clear—we went all in on Azure. The strategy was to adopt Azure VMware Solution to quickly establish the cloud as the central hub of our data, enabling us to drive innovation and optimize operations effectively.”

Steve Fortune, Chief Digital and Technology Officer, CSX

CSX employed Azure VMware Solution to seamlessly transition workloads to a symmetrical environment in Azure without the need for replatforming, refactoring, or rehosting. This solution gave CSX the ability to maintain operational consistency and use existing expertise while gradually building cloud competencies.

Rich explains, “Microsoft Azure acknowledges the importance of meeting customers where they are. For us, the ability to migrate our databases from VMware stacks to Azure VMware Solution was crucial in accelerating our transition to native Microsoft capabilities.”

By using familiar VMware tools and processes, Azure VMware Solution facilitated the shift to native Microsoft capabilities while minimizing disruption and complexity. With the dedicated Azure infrastructure, the solution scales rapidly, so CSX can maximize existing VMware investments while benefiting from the scalable resources of Azure. This comprehensive approach supports efficient cloud migration, operation, and modernization.

“Microsoft Azure acknowledges the importance of meeting customers where they are. For us, the ability to migrate our databases from VMware stacks to Azure VMware Solution was crucial in accelerating our transition to native Microsoft capabilities.”

Dave Rich, Chief Architect, CSX

The migration from static reporting to real-time data streaming has revolutionized decision-making at CSX. With direct incorporation into the backbone of Azure, the company significantly reduced latency and facilitated more efficient routing of traffic within the Azure infrastructure. CSX now makes faster, data-driven decisions to optimize performance across its network.

In a large-scale transportation network like that of CSX, even small delays can cascade into significant disruptions. According to Rich, “With the proper Microsoft support, what was previously a 14-second delay between Chicago and Des Moines for our train engineers is down to just 1.5 seconds.” By reducing latency by over 89%, CSX delivers near-instantaneous data transmission and faster response times to operational issues.

Revolutionizing rail inspections with AI at the edge

The scalability and adaptive cloud approach with Azure have been instrumental in helping CSX become AI-ready. The company can also deliver a more secure workload and application performance across operations, including remote workplaces, like train inspection portals.

The adaptive cloud approach unifies data and AI across a distributed estate with a common hybrid and edge platform. For example, by applying Azure Arc and Azure Local, CSX now performs real-time railcar inspections at speeds of up to 40 miles per hour. Rich notes, “What once required months of training and significant resources now happens instantly, with AI models detecting issues like leaky bearings or grain leaks with remarkable accuracy. This technology, combined with Azure Arc and Azure Local for onsite processing, has saved us substantial time and money and enhanced the safety and efficiency of our operations. It’s a game changer for the rail industry.”

“This technology, combined with Azure Arc and Azure Local for onsite processing, has saved us substantial time and money and enhanced the safety and efficiency of our operations. It’s a game changer for the rail industry.”

Dave Rich, Chief Architect, CSX

CSX has implemented FAA-approved autonomous drone inspections at 13 rail yards, using machine vision models developed in Azure Machine Learning Studio, deploying 6 of 24 use cases to date. This new process has reduced inspection time by 90% for the 6 use cases, resulting in improved train yard fluidity, uninterrupted operations, greater employee safety by minimizing track exposure, and increased inspection frequency. The solution uses Azure capabilities for real-time data processing, with plans to further advance autonomy for beyond visual line of sight operations.

CSX has also empowered frontline workers with data analytics, decision support, and AI tools that rely on Azure VMware Solution. These tools streamline field operations, allowing workers to access vital insights from tablets and devices, amplifying their ability to respond to challenges quickly. With Azure VMware Solution, CSX can handle large volumes of data with low latency and high availability, which significantly improves the performance and reliability of its data-driven applications.

“We wanted to make this migration as seamless as possible to our rail workers—and we did,” Rich says. “They now open their tablets and see that they are better connected to the tools and resources they need to work effectively.”

CSX migration: From on-premises to the Azure cloud platform

The diagram below illustrates how CSX uses Microsoft Azure services to fine-tune rail operations. It highlights real-time data streaming, AI for rail car inspections, and Azure Local for onsite processing, significantly improving safety, efficiency, and decision-making.

Diagram shows how CSX uses Microsoft Azure services to improve rail operations. It highlights real-time data streaming, AI for rail car inspections, and Azure Local for onsite processing, improving safety, efficiency, and decision-making.

More about this diagram

Switching tracks: CSX migrates to power AI-driven operations

Through its migration to Azure, CSX has established a robust foundation for future AI-powered innovation. By moving critical data from on-premises systems to the cloud, the company can now apply advanced AI workloads that increase efficiency and improve safety. For example, real-time data streaming supports predictive maintenance and bearing heat sensor telemetry to prevent derailments, while computer vision scans for other safety conditions.

Additionally, AI-powered tools assist employees in managing train stoppages more effectively, improving service reliability and reducing costs. “Whether to increase security or efficiency, we flow ideas through innovation all the way to proof of concept,” Fortune says. “It’s a really great combination of technology and culture coming together to accelerate what we do.”

This migration has modernized CSX’s operations, empowering the company to explore new AI-driven opportunities that transform its business.

Leading the rails: CSX modernizes with generative AI

From predictive maintenance to operational efficiency at intermodal terminals, CSX continues to push industry boundaries. Using AI-assisted camera technology at terminal gates, the company can now detect departing trucks without human involvement, reducing congestion and improving driver efficiency.

“With Azure and AI-powered camera technology at our gates, we can automatically detect bobtail trucks in real time, eliminating the need for human intervention or stops. This innovation streamlines operations and delivers a faster, more seamless experience for drivers.”

Dave Rich, Chief Architect, CSX

“In intermodal operations, drivers are paid per turn, so prolonged stays create congestion. Customers want to get in and out of the terminals quickly,” Rich explains. “With Azure and AI-powered camera technology at our gates, we can automatically detect bobtail trucks in real time, eliminating the need for human intervention or stops. This innovation streamlines operations and delivers a faster, more seamless experience for drivers.”

Looking ahead, CSX plans to more deeply connect its data systems with Microsoft Fabric, providing greater transparency and agility.

“The migration to Azure is just the beginning,” says Fortune. “We’ve laid the foundation to explore opportunities we could only imagine before.”

By merging nearly 200 years of expertise with cutting-edge cloud technology, CSX is leading the way in modern rail operations. This transformation advances its services and redefines how goods move more safely and efficiently across the country.

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