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UPDATE 1-CSX's Hunter Harrison bashes U.S. trade groups over rail complaints

(Adds background on CSX service, paragraphs 8-10, STB involvement, paragraphs 11-12)

Aug 17 (Reuters) - CSX Corp Chief Executive Hunter Harrison hit back at dozens of trade groups that urged a federal probe of service disruptions at the No. 3 U.S. railroad, saying their complaints were "grossly exaggerated," according to a letter seen by Reuters on Thursday.

The Rail Customer Coalition this week asked federal rail regulators to investigate CSX's "chronic service failures" and called on Congress to make it easier for shippers to file complaints and allow other operators to use CSX track during disruptions.

Harrison responded on Wednesday to the shippers group, defending what he called the "transformational changes" implemented since he took over as CEO in March to boost productivity and the railroad's financial performance.

Harrison, a septuagenarian executive known for turnarounds of Canadian railroads, also slammed the trade groups for not discussing their problems with him first and said the groups went public to advance their own legislative agenda.

"CSX was greatly disappointed with your many unfounded and grossly exaggerated statements in your letter of August 14 related to the service experienced by some customers," Harrison wrote.

"The changes we are implementing today will deliver measurable improvements in key service metrics, resulting in our customers' freight moving more consistently, reliably, and cost efficiently across the CSX network," he said.

Harrison said the Jacksonville, Florida-based railroad was acting aggressively to address service disruptions and would work with the Surface Transportation Board, the main U.S. rail regulator, as it monitors CSX's "ongoing improvement."

The Rail Customer Coalition's Monday letter echoed complaints from current and former employees and union officials who told Reuters that job cuts and rapid-fire changes to operating procedures - like closing hump yards, where rail cars are sorted, and doubling the length of trains - are disrupting service.

Shippers and employee sources said Harrison's changes are causing rail cars and trains to sit idle or be re-routed across multiple states, delaying product shipments and leading to inadequate customer service.

An analyst survey last month found shippers have moved freight to rival Norfolk Southern Corp and truckers.

On Tuesday, the Surface Transportation Board said it requested CSX submit weekly service performance data as it holds ongoing talks with senior management and monitors "CSX's service levels and the effectiveness of its recovery efforts."

A spokesman for the STB did not immediately respond to a request for comment on Harrison's letter, nor did the Rail Customer Coalition.

(Reporting by Eric M. Johnson in Seattle; Editing by Bernadette Baum and Dan Grebler)