Mongeau Appointment to NS Board of Directors Seen as Helping The Carrier Make Smooth Transition to PSR

The appointment of former Canadian National CEO Claude Mongeau to the board of directors of Norfolk Southern is linked in part to his experience with the precision scheduled railroading operating model, an analysis by Trains magazine concluded.

Mongeau had experience with PSR during his time at CN between 2010 and 2015 after replacing E. Hunter Harrison who has brought PSR to CN.

During his tenure at CN, Mongeau focused on forming close partnerships with shippers, including frequently speaking with them about their supply chains.

Trains noted that CN considers itself to be a supply chain partner and not just a railroad.

During Mongeau’s time at the helm of CN, traffic there grew 17 percent, which was more than double the industry average.

Revenue rose by 52 percent and the operating ratio fell to 58.2 percent.

Mongeau also sought to rebuild relationships with shippers who were miffed with the disruption and rapid rate of change that Harrison imposed when moving CN to the PSR model starting in 1998.

The analysis observed that NS has been seeking to avoid the type of quick changes that Harrison introduced at CN and later CSX.

NS has sought to work with shippers before making operational changes.

However, NS has angered some shippers by implementing what they view as more restrictive demurrage and accessorial charges that the carrier said are designed to move railcars faster.

Comparing them to unpopular baggage fees instituted by the airline industry, Trains said shippers consider the NS charges to be a money grab and that federal regulators are reviewing the fairness of them.

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