NS Settling on 10 Locomotive Models

The news that Norfolk Southern is slashing the size of its locomotive fleet has been out for a while but more specific details emerged this week.

Company officials said during the first quarter earnings call that the adoption of the precision scheduled railroading operating model will mean reducing the locomotive fleet size by 22 percent.

Most of the older models will be retired from the NS motive power roster as the carrier moves toward operating fewer and longer trains.

During an investor’s day last year, NS management said it planned to cut the locomotive fleet by 500 units, but since then the carrier has actually removed 703 units from active service.

As of March 31, NS had an active fleet of 2,801, which is 20 percent less than the 3,515 it had in late 2018.

At the end of 2018, NS had 606 units in storage. That figure grew to 1,022 units by the end of 2019.

NS plans to retain 402 of its stored locomotives as part of a surge fleet to handle a sharp increase in traffic.

Others in the stored fleet will be rebuilt as part of a DC-to-AC traction conversion program.

NS Chief Financial Officer Mark George said the carrier is removing from active service the oldest, least reliable, and least efficient locomotives.

In the process, it has eliminated the use of nine models and is creating a fleet of 10 models.

Company officials say that will save money by reducing the inventory of some parts and lessening the need for some mechanical shop workers.

During the first quarter of 2020, NS sold 300 locomotives and will sell or scrap the remaining units that it has in storage but doesn’t plan to keep.

Falling traffic and revenue has led to a reduced capital budget for 2020 and that has consequences for the motive power fleet.

NS will not accelerate its schedule for transforming DC units into AC ones and it will delay until next year some conversions that had been planned for this year.

The carrier will also suspend rebuilding units used in local service.

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