The TOP21 plan, which was implemented across the railroad on July 1, reduced the number of through trains by more than 10% as tonnage moves on fewer but longer trains that rely on distributed power.
Now, Chief Marketing Officer Alan Shaw told an investor conference on Wednesday, NS is working to blend some bulk traffic into regularly scheduled merchandise trains. It’s also working to increase the productivity of yard and local crews.
The third phase, expected to come next year, will take aim at intermodal train efficiency.
NS continues to seek other opportunities to trim costs as the operating plan requires smaller car and locomotive fleets — and smaller maintenance forces. With 15,000 freight cars and 700 locomotives in storage, NS this week laid off 285 mechanical department employees across the system, Shaw says.
Traffic volumes on NS, as with the rest of the big U.S. Class I systems, remain under pressure from reduced demand for coal, tougher competition from trucks, and lingering uncertainty over trade disputes.
For the quarter to date, NS volume is down 3% overall, with intermodal off 5% and coal down 15%. Every merchandise sector — including agriculture, chemicals, forest products, and metals and construction — is down except for automotive business, which is up 3%.
NS expects third-quarter volumes to be down compared to last year, but believes fourth-quarter volumes will be flat thanks to growth in intermodal and automotive shipments compared to 2018, Shaw says.
The railroad has not chased volume or reduced intermodal rates as trucking rates have fallen, Shaw says. In fact, over the past nine months, intermodal pricing has been the strongest it’s been in eight years, Shaw says.
Construction of the new NS headquarters building in Atlanta continues on schedule, with the railroad expected to move from Norfolk, Va., during the summer of 2021. The finance department and executive team has already moved to NS office space in Atlanta, Shaw says.
Shaw spoke at the Cowen & Co. 12th Annual Global Transportation Conference.
Don’t understand why they are moving to Atlanta , its not Atlanta Southern , but Norfolk Southern , its a VA. based company , wasting money building a new building when all you hear oh we have to trim expenses and lay off hundreds of people , yea that makes real cents, idiots from the board room making dumb ass decisions , how about this lay off the board room people you can save real money then !
The railroads will continue to see market declines while they prop up their pricing to maintain phony profits at the cost of losing more market share. They don’t care. Excessive profits at all costs.