NS Head Concedes Service Not Good Now

The new president of Norfolk Southern acknowledged at a shippers convention that his railroad isn’t doing a very good job right now of serving them.

“We don’t have a good product right now,” Alan Shaw said in remarks to the Midwest Association of Rail Shippers as reported by Trains magazine on its website.

“That’s unacceptable to me, that’s unacceptable for our employees, and it’s unacceptable to our customers,” Shaw said in Chicago.

Shaw attributed the lackluster service in part to labor shortages and the effects of the COVID-19 pandemic.

Among the steps Shaw said NS is taking to improve service include increased hiring of new workers, offering financial incentives to existing employees in an effort to increase crew availability and having supervisors fill in on some jobs, such as ferrying crews to and from train assignments.

Among the incentives being offered to workers are buying back vacation time and paying retention bonuses. Employees can also earn a bonus by making referrals to the NS training program.

Although he didn’t offer a timeline for how long it will take to improve service, Shaw pledged that NS will get things fixed and denied that the service issues are linked to the precision scheduled railroading operating model that it adopted in 2019.

“I’m not in position to tell you when we’ll get all the pieces in place,” he said. “But we will, fairly soon, be in a position to tell you that. And then we’ll have very candid and very direct conversations with our customers. Because you need to know that.”

To read more of Shaw remarks, visit https://www.trains.com/trn/news-reviews/news-wire/new-ns-president-admits-problems-promises-solutions/

NS Details Service Issues in Letter to STB

Norfolk Southern President Alan H. Shaw acknowledged in a letter to the U.S. Surface Transportation Board that its service quality is not where it should be.

The letter, dated Dec. 10, outlined the steps the Class 1 carrier is taking to improve its performance.

Shaw’s latter came in response to an inquiry from STB Chairman Martin Oberman who had written in November to then NS President James Squires to ask the railroad to address the deterioration of “key operating metrics” and an increasing number of shipper complaints about NS service.

Shaw blamed high workers attrition and a tight labor market for the service issues, noting that the company has been actively seeking to hire new conductors.

The service issues have been particularly acute in the Cincinnati-Chattanooga, Tennessee, corridor; in Birmingham, Alabama; and on the former Southern Tier line east of Buffalo, New York.

NS has taken such steps as redeploying personnel, reworking crew districts on the former Cincinnati, New Orleans & Texas Pacific line, and taking advantage of reduced activity during the Thanksgiving holiday period to alleviate yard congestion in Birmingham and Chattanooga.

However, Shaw said similar progress has remained elusive for the Southern Tier.

As for hiring new conductors, Shaw said that through Dec. 6 NS had 285 employees in conductor training with another 939 prospective employees in the pre-employment process.

The company has offered economic incentives to prospective new hires and existing workers to encourage them to continue working for NS.

Shaw said it will take time to get its new hires into position and to address the service issues it has experienced.

The letter from Shaw to the STB can be viewed at https://www.stb.gov/wp-content/uploads/NS-Response-Letter-to-Chairman-Oberman-Regarding-Service-Issues_December-10-2021.pdf

NS Top Managers Discuss Steps Taken to Address Crew Shortages, Freight Service Issues

Norfolk Southern executives briefed an industry conference last week on steps it is taking to mitigate crew shortages and return service to previous levels.

As reported by Trains magazine on its website, the NS officials said a first step is filling job vacancies in places that have had unusually high attrition, as much as 50 percent above normal in the past seven months.

Among the steps NS has taken is to step up the hiring and training of new conductors, getting new hires into service faster, seeking to improve worker retention by offering incentives to remain on the job, and making operational changes.

The latter has involved operating longer trains and temporarily locating operating personnel in areas where crew shortages have been acute.

NS Chief Financial Officer Mark George said that despite offering good pay and benefits, NS has had difficulty recruiting new employees and keeping those it has because of the nature of the work.

It is largely outdoors and involves working around the clock and on weekends.

George said that increasingly workers are gravitating toward jobs that better fit the lifestyle they wish to lead.

The article can be read at https://www.trains.com/trn/news-reviews/news-wire/norfolk-southern-working-to-alleviate-crew-shortages-and-improve-service/

STB Asks NS to Address Service Issues

Norfolk Southern has been asked to address service issues that a key federal regulator described as a “poor performance.”

Martin Oberman, chairman of the U.S. Surface Transportation Board, wrote to NS CEO James Squires to ask him to provide regulators with “a review of the current state of NSR’s network, and your assessment of what factors are affecting NSR’s ability to achieve past levels of fluidity and consistent service, and in particular the impact on customer service of previous headcount reductions for train, yard and maintenance employees.”

Oberman’s letter recounted how several key service metrics at NS have deteriorated and are hovering far below comparable numbers for 2019.

This has included a decline in average train speed of manifest freights, an increase in the average system dwell time and a rise in the number of manifest freight trains being held per day.

At the same time, the number of operating employees at NS has declined by about 8,200 each month during the past three months, suggesting the carrier lacks enough workers to avoid the service problems it has experienced.

The letter also cited an increase in complaints to the STB about NS service, including missed switches, cars stranded in yards, longer transit times, operating plan changes without notice, and a lack of communications from customer service.

Oberman wrote that this has increased costs for these shippers without any corresponding compensation from NS.

The letter can be read at https://www.stb.gov/wp-content/uploads/Letter-to-J.-Squires-re-Service-Issues.pdf

NS Outlines Operations Improvements

Norfolk Southern operating executives this week gave an overview of their efforts to relieve traffic congestion, particularly in the southern regions of the network, pointing to how adding motive power has enabled NS to reduce the number of delayed freight cars.

“We’ve progressed with our service recovery plan during a quarter in which we grew our business, handled near-record volumes, and achieved a record second-quarter operating ratio,” Chief Operating Mike Wheeler said. “We are pleased with the increasing efficiency of our operations.”

Also helping out was the reopening of the hump at DeButts Yard in Chattanooga, Tennessee.

“To continue to improve service, a portion of the hump was reactivated on May 17 to keep pace with near-record carloads,” Wheeler said. “This hybrid model, which calls for the humping of local traffic while still utilizing block-swaps for through traffic, gives us the best balance between service and efficiency.”

Another step was reopening the route between Birmingham, Alabama, and Macon, Georgia, via Columbus, Georgia, to through traffic in order to avoid bottlenecks in Atlanta.

NS said this has cut transit times for carloads moving from Mississippi to Georgia.

During the second quarter of 2018, NS handled 6 percent more volume with only a 1 percent increase in crew starts as train lengths reached record levels.

However, NS remained weighed down with average train speeds of 18.4 mph and terminal dwell times of 28.4 hours. Both metrics were 14 percent worse than the second quarter of 2017.

But when compared to the first quarter of this year, terminal dwell times improved 1 percent.

Yet train speed fell 3 percent and the railroad’s composite service metric, which measures a combination of on-time performance, local service performance, and carloads making scheduled connections, declined 2 percent.

NS CEO James Squires acknowledged that service is not where management wants it to be and what customers expect.

In recent months, NS has placed back into service 75 of the 125 older General Electric units it is running through its DC-to-AC conversion program this year.

Wheeler said 130 of the 155 short-term leased units are on the road in revenue service.

NS expects to hire 1,800 crew members this year, which is 700 more than expected.

Taking into account normal attrition, NS will have 300 additional train and engine employees by late this year.

NS Leasing More Locomotives, Reopening Hump Yard

Norfolk Southern has continued leasing locomotives to handle traffic surges and alleviate congestion that has occurred in particular in the southern reaches of its network.

The Class 1 carrier leased 90 locomotives in the first quarter and has added another 50 leased units to its fleet

NS CEO James Squires said the additional motive power will help handle traffic growth and enable the carrier to convert 120 older six-axle DC units to like-new AC-traction locomotives as part of its ongoing DC-to-AC conversion program.

It has also hired 400 new conductors to keep its train and engine crew headcount up.

Speaking to the Bank of America Merrill Lynch 2018 Transportation Conference, Squires said congestion in the South prompted NS to plan to reopen a hump yard in Chattanooga, Tennessee.

Squires said the hump at DeButts Yard will be a hybrid operation, meaning it will be used to classify traffic for local customers. Block swapping will continue to be done in the yard as well.

In the past year NS has increased its building of large blocks of cars and swapping them en route to minimize handling and to speed shipments along.

NS had closed the DeButts hump in May 2017. Since them terminal dwell times in Chattanooga have risen sharply.

Dwell times in Chattanooga have increased from an average of 33.5 hours in the second quarter of 2017 to 49.5 hours in April and to 62.7 hours this month.

Squires did not say when the hump would reopen. It remains in place, but workers must re-install the retarders used in hump operations.

Dwell times have also risen in other yards in the South as have average train speeds.

Despite efforts NS has made since last year, the service metrics in that region have not improved.

“We’re holding our own against strong volume growth,” Squires says. “Volume on our network is at a 12-year high.”

The NS CEO said that humps allow resiliency and operational flexibility when traffic rises by absorbing surges in traffic and metering the flow of volume by holding cars until they are ready to be released to customers.

“Customer service is not where we want it to be,” Squires said. “I want our customers to feel fully satisfied with the service they are getting from us, and right now many of them don’t.”

Despite the problems it has experienced, Squires said NS had the strongest volume growth among the Class I railroads for the year to date and that demand for rail service is the strongest he’s ever seen.

NS Outlines Plans to Improve Service

Norfolk Southern has acknowledged in a letter to the U.S. Surface Transportation Board that its service “is not where we or our customers need it to be.”

NS CEO James Squires said in the letter that restoring service levels is the railroad’s top priority.

Squires was writing in response to an STB request for Class 1 railroads to outline their service plans for 2018. The request came in the wake of persistent shipper complaints about deteriorating freight service.

In his letter, Squires said NS service challenges began in its southern network after a series of hurricanes last September and October.

Exacerbating the problems were snowstorms in December and January.

All of this resulted in the weekly average speed during the first 11 weeks of this year being down 16 percent compared with the same period in 2017.

It also fell by 11 percent in the first quarter of 2018 compared with the last quarter of 2017.

The average dwell time in terminals was 21 percent higher during the first quarter of this year compared with the same period in 2017 and 9 percent higher compared with the fourth quarter of 2017.

“Our local performance is currently 7 percent below where we typically perform,” Squires wrote. “Terminals and yards in the southeastern portion of our network in particular are performing below historical norms. These metrics are not where we want them to be. But, we are committed to improving for our customers.”

NS outlined the steps that it plans to take to improve customer service, which include:

• Resuming through freight operations on the former Central of Georgia route. “While we never idled this line, we ceased through freight operations over the route in the first half of 2017. We restored full through freight service to help improve network fluidity,” Squires wrote.

• Removing 100 road locomotives from storage and leasing 90 road locomotives. “Through March 23, 2018, we have 27 of the anticipated 90 locomotives on our property and have deployed 22 of these 27 in active service,” Squires said.

• Increasing the number of operating crews.

• Using technological solutions to improve operations.

• Developing a new customer notification system when shipments are delayed.

NS CEO Pledges Better Service in 2018

CSX is not the only eastern Class 1 railroad seeking to recover from service issues.

James Squires

During a speech at a shippers conference in Chicago, Norfolk Southern CEO James Squires pledged to work toward having a “more stable, resilient” network in 2018 in the wake of service issues in recent months

Squires made the remarks in response to questions about what was termed service volatility last year, some of it weather related.

“I am not here to make excuses. Yeah, it’s been tough,” Squires said. “When it gets cold in the south  . . . we struggle. It’s tough and it has been tough.”

Among the issues the NS has faced are periodic crew shortages, slower average train speeds and longer idle times of cars in yards.

NS’s average train speed fell to 20 miles per hour as of last week, versus 23 miles per hour a year ago, and the average time rail cars sat in terminals was 28.4 hours versus 24.7 hours a year ago.

“What you want from us is an action plan,” Squires said. “My commitment in 2018 is to a more resilient, durable, predictable, marketplace.”

Squires said the crew shortages were not a sign of a systemic problem and were localized and not system wide.

“We think that we have adequate resources to handle foreseeable demand, but we’ve got to get that resources equation right in each and every place we operate,” he said. “That can be a challenge.”