PSR Principles Being Adopted by NS

Count Norfolk Southern as the latest member of the precision scheduled railroading club.

The Class 1 railroad revealed this week that it plans to implement its own version of the model, which was popularized by the late E. Hunter Harrison at Canadian National, Canadian Pacific and CSX.

However, NS CEO James Squires said the carrier will only use PSR “as long as it improves customer service and enhances shareholder value.”

During a conference call with Wall Street analysts, Squires said NS is “looking at everything out there including elements of PSR that are complementary to our strategy.”

He said the railroad has recruited people with PSR experience and will pursue aggressive goals aimed at reducing the operating ratio and improving the bottom line.

NS Executive Vice President and Chief Operating Officer Michael Wheeler said the company has begun what he termed a “clean sheeting” process as part of developing a PSR plan that is expected to be implemented in phased in “cadences.”

NS officials said the company plans to reveal more details about its transformation to PSR at an investor’s day on Feb. 11, 2019.

The decision by NS to adopt elements of PSR and the expected move by Kansas City Southern to do likewise will leave only BNSF among Class 1 railroads not practicing some form of PSR.

Union Pacific announced a month ago that it is moving toward PSR and plans to implement it gradually.

Squires was cagey when asked if NS would engage in the type of major workforce reductions and downsizing of locomotive and freight car fleet that CSX has done.

“But suffice it to say that our goal is to produce a railroad that provides a more consistent service product at a lower cost,” he said.

Squires also emphasized that NS will do what it can to minimize service disruptions, something that plagued CSX when it rolled out PSR in 2017.

NS expects to reduce the number of freight cars on the road at any given time by operating a higher-velocity railroad.

The D.C.-to-A.C. locomotive conversion program will continue and NS will buy new locomotives as needed.

However, Wheeler indicated that NS will adopt many elements of PSR that CSX has implemented.

This will include merging unit trains with merchandise trains and operating longer trains seven days a week. Currently, some NS trains do not operate daily.

Wheeler said NS has already begun overhauling yard and terminal operations, including creating more blocks of traffic in local yards to allow those cars to bypass major classification yards.

He said NS is working with customers and short lines on improving blocking.

Wheeler said the new NS operating plan will be built from the local level up to the network level.

Also like CSX and other railroads that Harrison has overseen, NS will encourage faster loading and unloading of freight cars by increasing demurrage charges.

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