NS CEO Extols the Virtues of PSR

Norfolk Southern CEO touted the virtues of precision scheduled railroading this week during a presentation to investors, crowing about how the railroad is doing more with less.

That includes fewer trains, fewer employees and maybe soon fewer hump yard operations.

Squires said during the Morgan Stanley investor conference on Thursday morning that NS may idle more hump yards after closing humps at four classification yards this year.

NS has labeled its PSR plan as TOP21 and before it was implemented last year NS had 10 active hump yards.

But this year it has ceased hump operations in Bellevue; Sheffield, Alabama, Linwood, North Carolina, and Allentown, Pennsylvania.

Squires said that under the TOP21 operating plan NS has substantially reduced its dependence on major classification yards.

“Over the past year we’ve fundamentally changed the way we run our railroad to ensure the greatest efficiency across our operations,” Squires said.

“Step change is hardly adequate to describe the pace at which we’ve reduced resources and assets. And yet we’ve dramatically improved the service we’re providing to our customers and have created new capacity in the process.”

He said the potential exists for curtailing more hump operations.

NS has six hump yards still in operation including Elkhart, Indiana; Conway Yard near Pittsburgh; Enola Yard near Harrisburg, Pennsylvania; Chattanooga, Tennessee; Birmingham, Alabama; and Macon, Georgia.

Some changes NS has implemented were a response to falling traffic during the COVID-19 pandemic, including the end of dedicated auto rack trains due to auto assembly plants shutting down.

But once those plants resumed production, NS did not return to running auto rack trains but instead began carrying finished vehicles in the consists of general merchandise trains.

However, not all of the lost traffic is due to the pandemic. NS has seen its daily carloads fall 4 percent since TOP21 was fully implemented in July 2019.

Crew starts are 19 percent lower, train weight has increased 6 percent compared with last year, and the average train length has risen 11 percent.

NS has reduced its workforce by 24 percent since early 2019 and the active locomotive fleet is down 27 percent to 2,561 units as of July 31.

A surge in domestic containers has pushed NS intermodal volumes in recent weeks to fall peak levels as retailers seek to restock low inventories and e-commerce business and related parcel traffic has risen.

The carrier is working with such freight companies as J.B. Hunt, Hub Group, FedEx, and UPS to bring increase intermodal volume.

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