Norfolk Southern says it's working to improve service levels, handle growth

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NORFOLK, Va. — Norfolk Southern expects its sluggish railroad to speed up with the addition of locomotives and crews as it works to whittle down the number of cars online.

“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 on the railroad’s earnings call on Wednesday morning. “We are pleased with the increasing efficiency of our operations.”

NS handled 6-percent more volume with only a 1-percent increase in crew starts as train lengths reached record levels.

Yet NS operations remained bogged down during the quarter, with average train speeds of 18.4 mph and terminal dwell of 28.4 hours. Both measures were 14-percent worse than the second quarter of a year ago.

Compared to the first quarter, terminal dwell improved 1 percent. But train speed slumped 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, fell 2 percent.

NS stopped reporting the actual quarterly composite service metric figure as its service sagged.

“Service is not where we want it to be and where our customers expect and deserve it to be,” CEO Jim Squires says.

The reopening of the hump at DeButts Yard in Chattanooga, Tenn., helped smooth operations in the south, where Norfolk Southern’s single-track network has been the epicenter of both traffic growth and congestion.

The hump had been idled in May 2017.

“To continue to improve service, a portion of the hump was reactivated on May 17 to keep pace with near-record carloads,” Wheeler says. “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.”

NS continues to add to its active locomotive fleet. It has placed in service 75 of the 125 older General Electric units it is running through its DC-to-AC conversion program this year, Wheeler says. And 130 of the 155 short-term leased units are in operation.

The railroad continues to hire conductors. It will hire 1,800 crew members this year, 700 more than originally envisioned. Overall, the train and engine headcount will increase by 300 people when attrition is factored in.

“Beyond simply improving our current service, our plan will allow us to handle continued growth,” Wheeler says. “As our resources continue to come online, our operational improvements will accelerate.”

Two merchandise shippers gave different views of NS service, speaking only on the condition of anonymity.

“NS is not getting better and may be worse,” one merchandise shipper tells Trains News Wire. “Congestion in their yards is terrible, with no consistent travel times.”

Another merchandise shipper, however, says NS has improved service on the Alabama and Georgia divisions.

“Their local service on the Alabama Division has improved dramatically from the first quarter of this year,” the shipper says. “Service is now occurring as scheduled and work orders are being fully complied with. Back in the first month or two of this year, it wasn't unusual to only receive a single switch each week despite being scheduled for daily service Monday through Friday. And when the local did come in on an irregular single day out of five, they either weren't bringing all of the empties requested or they'd bring empties and leave without pulling loads.”

Earlier this year, NS reopened its Birmingham-Columbus-Macon, Ga., line to through traffic as a relief valve for the route via Atlanta.

The resumption of through service slashed transit times for carloads moving from Mississippi to Georgia.

“This lane had been experiencing 20-day transit times when traffic was routed via Atlanta and improved almost overnight to 10-12 days with the change via Columbus,” the shipper says.
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