Posts Tagged ‘NS CEO Alan Shaw’

CN, NS CEOs Defend Scheduled Railroading

January 21, 2023

CEOs of Norfolk Southern and Canadian National sought to make the case for why precision scheduled railroading is best for shippers and railroads during the recent Midwest Association of Rail Shippers.

As reported by Trains magazine on its website, CN CEO Tracy Robinson argued that scheduled railroading is working for shippers and the railroad alike.

NS CEO Alan Shaw reiterated a point he made last year that the Atlanta-based Class 1 carrier is seeking to refine its scheduled railroading practices to move away from the cycle of reducing its workforce during economic downturns as has been the industry standard.

Robinson described PSR as basic railroading that provides consistent service. The key to that is providing on-time service.

“We are moving meaningfully faster, and we are dwelling less,” Robinson said.

“So we’re learning as we go, we’re relearning as we go, and we’re going to remain focused on scheduled railroading.”

During his remarks Shaw said NS is no longer trying to “time the market” in its decisions about crew staffing and assets.

“Because frankly, that’s where we’ve gotten in trouble in the past,” he said. “The economy moves up, and we don’t have enough crews, or enough intermodal chassis, or enough locomotives.”

Shaw said NS is taking a longer view by seeking to determine what it needs to get to where it wants to be in terms of operating efficiency three to five years from now and pouring resources into achieving that.

He attributed the service issues NS has experienced in the past couple years to trying to move up and down with the economic cycle.

Reacting to the current economic cycle has been useful in achieving short-term profitability but Shaw said that has come at the cost of lost revenue opportunity in the longer term.

“We took a look at this, and look at the revenue opportunity you lose, when you have a poor service product,” Shaw said. “And we’re also talking about the additional costs. I don’t think people realize a faster railroad is a less expensive railroad. One that’s running on time, one that’s running on schedule, is less expensive than one that’s running off schedule.”

Additional information about what Robinson and Shaw had to say can be read at https://www.trains.com/trn/news-reviews/news-wire/cn-ns-ceos-tell-shippers-service-will-continue-to-improve/

NS Revamping Operating Philosophy

December 7, 2022

Norfolk Southern on Tuesday rolled out yet another service strategy that CEO Alan Shaw said is designed to enable long-term growth while enticing shippers to move freight by rail rather than by highway.

As reported by Trains magazine on its website, the Atlanta-based carrier will still employ the precision scheduled railroading operating model, but Shaw described it as a different form of it that will not focus not so much on reducing the operating ratio, which is the percentage of revenues that NS spends on operating expanses.

Instead, NS will seek balance among service, productivity, and growth.

“These are not competing priorities. They are complimentary,” Shaw said indicating that NS will not focus so much on reducing expenses and profit margin.

“We just can’t cut our way to sustainable growth,” Chief Financial Officer Mark George said during NS’s investor day program.

He said NS will strive to o provide consistent service even during tough economic times.

Shaw said NS management recognizes that the traditional approach of furloughing workers during economic downturns and cutting spending “did not work well.”

It led to a deterioration in service and lack of confidence by shippers.

Shaw acknowledged that NS has yet to reach its desired level of staffing and although its service has improved, it is not yet where shippers expect it to be.

In future traffic downturns, NS will avoid furloughing operating personnel so it can be better prepared for traffic rebounds.

“By serving more volume in the recovery, we generate more revenue, and by avoiding the disruption, we enable customers to trust us and build supply chains around us,” Shaw said.

A key to the new NS plan is running what Floyd Hudson, vice president of transportation, described as a disciplined operation, which he defined as running trains on time, switching cars within six hours, and putting the right car in the right block on the right train.

NS hopes this will enable it to attract business that now moves in trucks. If NS is able to pull off its new strategy its expects freight volume to grow between 2 percent and 4 percent annually while revenue increases by 5 percent a year.

Most of this volume growth is expecte4d to come from intermodal, which NS executives said could grow at twice the rate of the gross domestic product.

In a related development, NS has told the U.S. Surface Transportation Board that its has posted improvements in its service metrics in recent weeks, which it credited in part to improved staffing.

NS now expects to reach its pre-pandemic service levels service metric levels by May 2023. Its eastern counterpart CSX told regulators its goals remain unchanged because its network  resiliency, staffing and hiring levels, and current service metric trends do not yet justify changes to its service recovery plans.

CSX said that since late October it has met or exceeded each of the key performance targets it set last May in its service recovery plan. The ranks of conductors and locomotive engineers are near normal levels.

The Jacksonville-based carrier said it has an active personnel force of 6,918. It’s goal is to reach 7,000 to 7,100 by the end of this year.

NS told the STB that since last May it has exceeded its hiring of new operating workers while also exceeding its target levels for system velocity and on-time performance.

However, terminal dwell time remains elevated and its local service metric fell short of its six-month goal.

NS, CSX CEOs Tout Service Improvements

September 16, 2022

CEOs of Norfolk Southern and CSX said in remarks during investor conferences recently that their respective companies are slowly improving their freight service as newly hired conductors qualify for active duty.

The two Class 1 railroads have cited crew shortages as a major contributor to service issues that have drawn the ire of shippers and regulators.

Both spoke at the Cowen Annual Global Transportation & Sustainable Mobility Conference.

As reported by Trains magazine, CSX head James Foote said his railroad is lagging its goal of full train and engine personnel.

CSX now has 6,800 active T&E workers and expects to reach 7,000 active crew members by year’s end.

“We’re gradually, gradually improving,” Foote said. “Service metrics show it. Velocity shows it. Dwell shows it. On-time performance shows it. It’s a grind. It’s been really tough. But we’re continuing to show progress.”

At Norfolk Southern, CEO Alan Shaw said the conductor workforce have increased by 275 since the end of the first quarter with 923 conductors in training.

The level of active T&E crews is up 4 percent and close to matching the level of last year.

Shaw said merchandise on-time performance had improved to 67 percent in early September. Last May it had sagged to 48 percent.

“Demand for our product is exceptional right now, and it exceeds our capacity,” Shaw said. “As we speed up our network, which we have started to do, we have more capacity in our network and can take advantage of the volume opportunities.”

However, NS continues to see higher than desired crew attrition rates at terminals in Fort Wayne and Elkhart, Indiana; Louisville, Kentucky; and Cincinnati.

CSX, NS Execs Say Service Slowly Improving

August 20, 2022

Top executives of CSX and Norfolk Southern told an investors conference this week that their respective companies are slowly recovering from their freight service issues Trains magazine reported on its website.

Speaking to the Deutsche Bank 2022 Transportation Conference, CSX Vice President of Sales and Marking Kevin Boone said the carrier has a record number of conductor trainees in class and crew shortages are most acute in the Midwest and Northeast.

A few months ago, CSX crew shortages were focused primarily in the South.

NS CEO Alan Shaw said service improvements in the past month have resulted in some carload shippers diverting loads from tucks to rail.

“Our train speed is at levels we haven’t seen in over a year, and our terminal dwell is now at the best levels it’s been at this entire year,” Shaw said.

Still, he said NS is unlikely to reach 2019 operational performance levels until late this year or in early 2023.

Boone said CSX intermodal traffic is doing well, but merchandise and bulk operation freight movements are not where they need to be.

He said once personnel issues are worked out CSX expects to grow its intermodal and merchandise volume.

The article can be read at https://www.trains.com/trn/news-reviews/news-wire/csx-and-ns-optimistic-as-operations-slowly-improve-with-new-conductors-entering-service/

NS Launches New Operating Plan

June 28, 2022

Norfolk Southern launched on Monday a new operating plan that is largely focused on improving intermodal service although it will be applied to all types of freight shipments.

The plan, known as Thoroughbred Operating Plan|Service Productivity Growth was described as an evolution of its previous operating plan known as Thoroughbred Operating Plans 21.

TOP|SPG continues to build upon the elements of the precision scheduled railroading model with its emphasis on efficiency but also adding and more point-to-point intermodal service.

For example, NS will consolidate all intermodal traffic moving between Chicago and Harrisburg, Pennsylvania, at one terminal in Chicago, 47th Street.

Under the previous operating plan, NS operated one train daily between 47th Street in Chicago and Rutherford Yard in Harrisburg and one train daily between 63rd Street in Chicago and Rutherford.

In the new operating plan Chicago-Harrisburg intermodal operations will be consolidated at 47th Street and expanded to four daily trains between there and Harrisburg. The intermodal trains serving the 63rd Street terminal will be eliminated.

NS officials said they are seeking to increase the number of miles per day that cars travel by reducing how often those cars are handled en route and how much time they spend sitting in yards.

The running time will be adjusted for more than half of all road trains. Schedules will be changed for 90 percent of all scheduled trains.

There will be changes to 39 percent of yard blocks. The officials said the new operating plan seeks to reduce network directional imbalance, and simplify operations of routes and terminals.

The carrier indicated it will increase the number of daily intermodal trains it operates systemwide from 79 to 85.

NS CEO Alan Shaw cautioned that implementation of the plan won’t occur overnight.

In a video created to announce the new operating plan, Shaw said the goals of the plan are reducing the complexity of the NS network by reducing train meets and how often cars need to be worked while en route.

In a social media post, NS said the new operating plan “isn’t a radical change in how we work with our customers, but a shift in how we execute our operations to move their shipments more directly and consistently.”

NS said there will be no operating changes for most customers and for those who are affected It has been working with them to ensure they are prepared for coming changes.

Above all, NS indicated, the new operating plan seeks to provide greater consistency in the service provided to shippers.

NS Rings Bell to Open Stock Market Trading

June 9, 2022

Norfolk Southern executives rang the opening bell on the New York Stock Exchange on Tuesday (June 7) to mark the 40th anniversary of the creation of the company.

On June 1, 1982, the Norfolk & Western Railway merged with the Southern Railway to create NS.

Among the executives participating in the ceremony was CEO Alan Shaw, who was joined by members of the senior executive team and six craft railroaders from the operating division.

It was the fifth time that NS executives have appeared on the floor of the NYSE.

The first of those occurred on June 2, 1982, when the company’s stock began trading under the symbol NSC. Company officials also appeared in 2005, 2007 and 2012.

NS CEO Shaw Pledges Service Improvements

May 16, 2022

Norfolk Southern CEO Alan Shaw pledged during the company’s annual meeting to make the firm more customer-centric and operations driven.

Shaw had made similar comments during meetings with NS employees that he held during his first weeks on the job as CEO after replacing the now-retired James Squires.

“My first priority, and the top priority of every member of the Norfolk Southern team, is to restore service to the quality our customers expect and deserve,” Shaw said in a statement.

The statement said this means accelerating the railroads’s TOP|SPG operating plan, hiring the conductors needed to execute the plan and making it easier for customers to do business with NS.

During the meeting, NS shareholders elected Amy Miles to serve as independent chair of the board of directors for a one-year term to expire in 2023. She is former chair and CEO of Regal Entertainment Group.

Also elected to the board were Shaw and 12 others, including Thomas Bell Jr., chairman of Mesa Capital Partners; Mitchell Daniels Jr., president of Purdue University and former governor of Indiana; Marcela Donadio, former Ernst & Young partner and oil and gas sector leader; John Huffard Jr., co-founder of Tenable Network Security Inc. and Tenable Holdings Inc.; Christopher Jones, former corporate vice president and president of the technology services sector of Northrop Grumman Corp.; Thomas Kelleher, chairman of UBS and former president of Morgan Stanley; Steven Leer, former chairman and CEO of Arch Coal Inc.; Michael Lockhart, former chairman, president and CEO of Armstrong World Industries Inc.; Claude Mongeau, former president and CEO of CN; Jennifer Scanlon, president, CEO and director of UL Inc.; Squires; and John Thompson, former SVP and general manager of BestBuy.com LLC.