PSR To Help NS Close Gaps With CSX

A Norfolk Southern executive said recently that moving toward the precision scheduled railroading operating model is expected to enable the carrier to close productivity and operating ratio gaps it has with CSX, its primary competitor.

Speaking at a financial conference, NS Chief Financial Officer Cynthia Earhart said the Class 1 carrier will approach implementation of PSR with a much slower timetable that will avoid the type of disruptive change that occurred when CSX moved to PSR in 2017.

NS is using a process it has described as “clean sheeting” to redesign local service at yards and terminals that will make better use of locomotives, cars and operating crews.

Once that is completed sometime in 2019, the carrier will then turn its attention to a new systemwide service plan for  road trains that will be implemented gradually to minimize the potential for service problems.

“The biggest difference for us is we’re really trying to communicate very closely with our customers so that they understand what the changes are going to be and give them time to plan,” Earhart said.

She said there will be a lot of change to the way NS operates and that will affect shippers. NS officials have said they will provide more details of the plan to move to PSR during an investor day to be held next February.

Since switching to PSX, CSX has lowered its operating ratio by more than 10 points to 58.7 percent.

The NS operating ratio in the third quarter of 2018 was 65.4 percent. The operating ratio shows how much of revenue is devoted to expenses.

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