Last year, under its shift to Precision Scheduled Railroading, NS began clean-sheeting its yard and local network. Then, on July 1 this year, it flipped the switch on its new TOP 21 operating plan and began moving tonnage on fewer, longer road trains that rely on distributed power.
NS is beginning clean-sheeting operations at its 50 intermodal terminals, Jeffrey Heller, vice president of intermodal and automotive, told an intermodal conference on Tuesday. The goal is to find efficiencies, cut costs, and improve operations and service.
Once the terminal redesign is complete, the railroad will roll out new intermodal schedules. It also will look at combining shorter intermodal trains into longer ones, as well as determine where it makes sense to move anchor blocks of intermodal traffic in merchandise trains, Heller says.
The changes to NS intermodal trains would likely come early next year, Heller says, but not before the railroad collaborates with its customers.
Norfolk Southern’s intermodal growth strategy remains the same, despite the emphasis on cutting costs. Over the longer term, the rail industry needs to become more efficient as truckers move toward platooning and autonomous operations, Heller says.
NS has become a faster, more fluid railroad as it redesigned the merchandise network. Terminal dwell and average train speeds have shown significant improvement since late last year, which has rubbed off on the intermodal network, Heller says.
“Our service is not exactly where we want it to be but it’s improved dramatically,” Heller says.
He did not provide specifics on the railroad’s on-time performance. Unlike CSX Transportation and Union Pacific, NS has not publicly released trip-plan compliance figures as it adopts PSR. Instead, it has benchmarked its service metrics to 2018, a year when the railroad’s service was at the lowest levels since the Conrail split two decades ago.
NS intermodal volumes are down 2.2% for the year to date, which is above the 4% drop in overall North American intermodal volume.
The decline in domestic volume is partly the result of falling trucking rates, Heller says. Trucking companies ordered a record number of new rigs last year. Now that capacity has caught up with demand, truckers are scrambling to find business to keep their rigs rolling.
“We are now at a decision point, where we could either chase the business or wait for the growth to come back,” Heller says.
NS is in wait-and-see mode and has chosen to stick with its pricing power.
Heller spoke on Tuesday at the Intermodal Association of North America’s annual Intermodal Expo.
Doesn’t seem like the mainline merchandise network is really working yet.
Ridiculous plan. All metrics are in the toilet volume wise and these guys figure pricing doesn’t need to change. The railroad suits are in a marketing bubble.