Norfolk Southern gearing up for major operational changes, greater use of distributed power

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NEW YORK — Norfolk Southern will flip the switch on its new operating plan over the Fourth of July weekend and is preparing for the change by training crews and holding two dozen town hall meetings with employees and shippers at locations across the system.

“It is one big network cutover,” CEO Jim Squires told an investor conference today.

The TOP21 plan, based on the principles of Precision Scheduled Railroading, will initially affect Norfolk Southern’s merchandise, automotive, and bulk networks. The intermodal network will get a makeover next year.

“When you really cut through it all, the essence of TOP21 is run longer, heavier trains — and fewer of them,” Squires says. “So we will see train starts come down and train lengths and weights increase. And that has lots of beneficial effects on costs, including fewer crew starts, improved fuel efficiency, and lower equipment rents, for example.”

Crews are being trained to set up and use distributed power in advance of the July start of the new operating plan, which builds upon the clean-sheeting process NS used over the past 18 months to redesign yard and local service.

“At the local operations level, the big to-do connected to TOP21 is learning how to operate distributed power trains,” Squires says, noting that spreading power throughout the train is necessary for NS to significantly increase train length.

“We don’t have a lot of experience with DP. We have run DP trains, but it’s not a core skill,” Squires explains. “So we’re doing a lot of training in the field on how to assemble a DP train and how to operate it over the road.”

“We will be increasing the number of DP trains right off the bat with implementation,” Squires adds. “As time goes by, we will roll out more and more DP on the network.”

TOP21 will bring traffic increases to some areas of the NS system, including Harrisburg, Pa., Elkhart, Ind., and Chattanooga, Tenn., Squires says.

In some locations, NS has turned on the new plan early.

“We anticipate heavier traffic volumes into and out of Harrisburg. Seeing that coming, believing that we had the capability to handle those increased traffic flows already, we went ahead and implemented that node in the TOP21 plan,” Squires says. “So we’ve been we’ve been sort of easing our way into it at certain locations. The big trigger will be in July.”

NS is hosting town hall meetings that include operating employee and customers. NS also is meeting individually with about 250 shippers. The goal is to communicate the coming changes of the operating plan, Squires says.

“We believe that we will be able to implement TOP21 with a minimum of network disruption,” Squires says. “That is our goal.”

The majority of customers should see improved transit times and more reliable service, Squires says.

Next year, after NS has experience running the new plan, the railroad will turn its focus to rationalizing yards that may no longer be needed.

Clean-sheeting and TOP21 de-emphasize the use of major terminals in favor of pre-blocking at customer locations and local service yards. The new operating plan relies more on trains block-swapping en route to minimize intermediate switching, which can reduce transit time and improve service reliability.

The railroad announced details about its PSR-based operating plan during an investor day in February, including changes to local service and its locomotive fleet amid a drive toward a 60% operating ratio.

Squires spoke today at the UBS Global Industrials and Transportation Conference.

NEWSWIRETrains News Wire

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