Posts Tagged ‘NS service metrices’

NS Outlines Plans to Improve Service

April 5, 2018

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.

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NS Watching CSX Changes, But Also Working With its Customers to Improve its Service Metrics

May 19, 2017

When it was his turn to speak at the Bank of America Merrill Lynch 2017 Transportation Conference, Norfolk Southern CEO James Squires did not shy from acknowledging the elephant in the room.

Squires said NS is closely watching how chief competitor CSX is reshaping its operating plans. At the same time, NS has its own operating changes to make and it feels good about its performance thus far.

“We’re extremely focused on industry developments right now and watching what’s going on carefully, all the while focused on executing our plan,” Squires said.

He spoke to the conference shortly after CSX Chief Financial Officer Frank Lonegro raved about the improvements CSX has made in its operating metrics nearly two months since its new CEO, E. Hunter Harrison, came aboard and began implementing his precision scheduled railroading philosophy.

Squires said there is a difference between network performance and customer service.

The former measures such things as train speeds and terminal dwell time, which Squires said may be important to railroad managers.

“But our real focus these days is on customer-facing metrics,” he said, adding that NS is working with its customers to define joint service metrics.

He said this would include such things as getting containers off intermodal trains when promised and providing shipment consistency for merchandise shippers.

“What we’re trying to do with our customers is measure performance in the entire supply chain,” Squires said. “That’s different than merely measuring terminal-to-terminal train performance.”

Squires said NS might borrow some operating ideas from CSX if they makes sense.

“Operations best practices are operations best practices and we all operate out in the open,” he said. “I’ve been very clear with our operations team that if they see the other guy doing something smart, then don’t let your pride get in the way of the right thing for the customer. And by smart, I mean better use of the assets and good for the customer and the business long term. If those two things are present, then we’re all over it.”

One area where NS might follow CSX’s lead is with hump yards. NS has 10 hump yards and has closed three humps during the past two years.

“And others are under review. That may make sense, it may not,” Squires said.

NS is seeking to reduce its operating ratio below 65 percent by 2020, but the railroad’s board of directors has sought an acceleration of that plan by offering management incentives to hit operating ratio and earnings per share targets by 2018.

“We’re pushing as hard as we can,” Squires said.