NORFOLK, Va. — Norfolk Southern’s decision to purge older locomotives reduces the size of its fleet by 22%, which executives say was made possible by the Precision Scheduled Railroading focus of moving traffic on fewer but longer trains.
NS has removed 703 units from its fleet, topping the 500-unit target the railroad set during its investor day last year. The railroad’s TOP 21 operating plan includes blending different types of traffic — bulk, intermodal, and merchandise — into longer trains, which reduces locomotive requirements [see “NS plans to cull 500 locomotives,” Trains News Wire, Feb. 11, 2019].
The railroad’s active fleet has shrunk to 2,801 units as of March 31, a 20% reduction from the 3,515 in use at the end of 2018. Some 606 units were stored at the end of 2018, a figure that grew to 1,022 by the end of last year as operational changes were rolled out.
As it sells or scraps 703 older units, NS will retain 402 stored locomotives that will be available as a surge fleet, as well as being cycled into shops as part of the railroad’s ongoing DC-to-AC traction conversion program.
“Simply said, it’s a capacity dividend of our TOP 21 PSR implementation, which has resulted in the decongestion of our yards and road network, allowing cars to turn quicker in the terminals and trains to move faster on the network,” Chief Financial Officer Mark George said on the railroad’s earnings call Wednesday. “The blending of our discrete networks resulted in fewer but longer trains. Fewer trains, along with better balancing of our routes, require fewer locomotives.”
Nearly 300 units were sold in the first quarter, George says, with the remainder up for sale or scrapping by the end of the year.
“The team targeted removal of the oldest, least reliable, and least efficient of the locomotives and eliminated entire model lines, moving us to a more homogenous fleet of 10 models from 19,” George says.
NS did not immediately respond to an email seeking details on which locomotives models were purged.
The model reduction has allowed NS to reduce parts inventory and its mechanical shop forces.
NS will continue its DC-to-AC conversion program, which produces a like-new locomotive at about half the cost of buying new, officials have said.
“We’re committed to that revitalization,” Chief Operating Officer Mike Wheeler says, noting he’s been pleased with the reliability of the AC-traction locomotives.
Last year executives said they would accelerate the DC-to-AC conversion program this year. But due to the economic impact of the COVID-19 pandemic — and a 25% reduction in capital spending this year — NS will stick to its original DC-to-AC conversion schedule. That will push off until 2021 some conversions that had planned for this year, Wheeler says.
Also put off until next year: Rebuilds of the local unit fleet.
NS arrived at its decision to roster 3,200 locomotives by modeling how the PSR-based operating plan would handle traffic levels from 2018, George says.
The railroad’s revenue ton-miles were 6% higher in 2018 than in 2019.
The number of train starts, meanwhile, dropped during all three phases of the implementation of the TOP 21 plan. Train starts were down 11% in the third quarter of 2019, 15% in the fourth quarter of 2019, and 19% in the first quarter of 2020, with each decline much deeper than the quarterly slump in traffic.
In reading the Feb 2019 article on reduction of locomotive fleet at NS, AVP Doug Corbin said a lot, but since then who is making this work since he retired?
Whats next I,m guessing Cut, Chop, put in a storage closet far far away management personal that were recently hired that don’t have railroad experience , want to save money this is what must be done start by getting rid of the pencil pushers !
In other news, NS and other class I’s continue to lose traffic to trucks. Business continues to shrink due to lack of customer focus and sales. Bankruptcy and irrelevancy are next.
A CN trainmaster said it best 40 odd years ago’ ” Damn customers always bitching and complaining about the service. Don’t they realize that we have a railroad to run here” The quote may not be exact I am 82 years old, but the message is right.’
“Reduced local and yard assignments.” Shorthand for: “Let’s see how many customers we can drive get rid of this year.” Do not be surprised if NS management starts to shed a lot route mileage next.
Another model that NS pulled from service was their single prototype AC44C6CF 8520 due to not being able to resolve a number of technical issues which included software problems that could not be resolved. There was a second AC44C6CF, 8521, that was under construction, but it has been rebuilt as AC44C6M 4320. The Dash 8.5s were retired for pretty much the same reason as 8520.
NS needs to donate some these engines too Museums like Altoona, Pa. NS does nothing for that Museums in Altoona Pa.?? What is NS Lazy to donate stuff too Altoona Pa.
DANIEL – Thanks for the detailed post and all the effort and research that went into it.
For those of you wondering what models are cut: here’s my assumptions. I have very little authority in this matter; I’m just a NS follower who’s making some guesses based on what I have seen. We should keep in mind that a lot of this info is probably watered down for shareholders, so what we think of as distinct models NS might lump together as a unit.
Regarding the parentage of the SD40-2s, NS seems to be selling models irrespective of heritage for now (there were BN, Southern, N&W and Conrail units in the 4 or 5 blocks sold this spring). Those units that have been sold are likely those that have mechanical issues or were due for overhaul sometime soon. The 10 remaining high-hood SD40-2s are partly stored, but most are still in service in Ohio/Michigan, for now. Keep in mind that NS probably bought more SD40-2s than it needed from leasers in 2013-2016, so they’re not purging the class yet.
The models eliminated entirely are the SD80MAC, SD70/SD75M/SD70M/SD70M-2, C40-8/C40-9/C40-8W, the SD60M/SD60/SD60I, MP15DC (right on the cusp of all this), and oddballs like the RP14BD, GP38-2G, Dash 8.5 (to be sold), MP21E, and F units.
Next on the chopping block are probably more GP38-2/3, GP40-2, and similar four-axle units. NS seems to have halted or slowed Admiral cab rebuilds. The GP60s, with their odd horsepower rating, might be next if NS decides the GP34ECO program is not worth the effort. They also seem to have stopped building GP59ECOs, and instead are focusing on one or two SD33ECO rebuilds (state grant money at work). Also, the MP15Es and SW1001s; many have been stored, several are sold. NS seems to be trying to rid itself of endcabs (which makes sense, given that even though many of these units have been rebuilt, they’re approaching 40+ years old).
What’s left as of now:
I’m assuming that the SD40-2s, SD40Es, and the 6 SD45-2s are lumped into one class. This may also include the SD33ECOs, which are 3,000 HP as well.
All of the SD9043MACs were rebuilt into SD70ACUs, which have the same horsepower as the SD70ACe and SD70ACC classes, so these are also likely lumped together. (4,300, 4,500).
The C44-9Ws aren’t going anywhere except into rebuilding. The ES44DCs are also likely lumped in with these units; originally, they were supposed to round out the 9000-series units. Unlike the SD70M-2s, NS seems to want to keep their DC EVOs for now.
Next are the GP59 and GP40-2 classes (3,000 HP); some of each have been sold, but many are still on the roster. And the GP59ECOs.
GP38 variants: GP22ECO (and their GPTEB slugs), GP38-2 (about 70 high hoods still) and GP38-3. The ECOs, though new, are 710 engined, so they might be returned to EMD (since there’s only two, they’re probably on long-term lease).
The SD60Es; their 4,000 HP now makes them odd as well, but they’re fairly new, and so far NS has shown a reluctance to sell E series rebuilds aside from the obsolete endcabs.
Finally, the AC44C6M/ES44AC; these are not going anywhere.
Personally, I really only miss the C40-9s (mostly because of the cab), the SD80MACs, the C40-8Ws, and the end-cabs. There are still C40-8s running around in lease service or shortlines (Pan Am has CSX units), and in my case, I can still hunt SD70s on CN’s Bessemer sub or SD70Ms on UP.
The tragedy will be if NS gets rid of its unique GP59/GP60s, all of its endcabs, and the remaining Alco-bodied RPU6 slugs.
IIRC, when predecessor Norfolk and Western dieselized, they standardized on only 3 models: the EMD GP-9 Passenger and Freight), ALCo RS-11and ALCo T-6. Before that, I think that they tried an F7 A-B-B-A set, GP-7s and RS-3s before making the big decision.
I would think The Rochester and Genesee Valley RR Museum or the New York Museum of Transportation Both in Rush NY Would say Thank you for a Locomotive or some harder to find parts . I would vote my shares to donate to them
A “booming” economy (as measured by the quite imperfect and misleading metrics of GDP and share prices) doesn’t necessarily mean a booming freight transport sector, let alone a booming rail freight transport sector.
DANIEL and GERALD —- I think Mr. Norton was trying to say railroading was shrinking even when the economy was growing.
A few months ago now seems to be another age. My best understanding is that’s what was happening – a booming economy, shortage of truckers, railroads checking out.
A few months ago I was looking forward to springtime trainwatching – and already, before COVID, I was reading on these pages about shrinking traffic.
Mr Norton, is pot legal down your way now?
Jim Norton, not sure what rock you’re living under, but the economy is NOT growing right now, as a matter of fact GDP was DOWN 4.8% in the 1st quarter, the 2nd quarter will be even worse.
Sorry, altoonaworks.info
Altoonaworks.com lists several, but not all , models held out for disposal
What will happen when the savings from these reductions in assets & employees to boost the stock holders dividends runs out & the traffic levels continue to drop? What will the next “trick” be… will/could they start charging states for access to rail service?
The key to donations is to determine if the recipients have the resources to maintain them.
Many years ago, the Temple, TX Railroad Museum was the beneficiary of donations from the Santa Fe. You can see the equipment outside of the former Santa Fe Office building and station in Temple. It houses Amtrak in a small portion of what is one of the most beautiful railroad buildings in the U.S.
Apparently the people in Temple who accepted the equipment donations never considered how it would be maintained. As it turned out, they have not had the funds to do so.
If you arrive or depart Temple on the Texas Eagle or just visit the station, you will be treated to one of the worst railroad junk yards that I have ever seen. The donated equipment is just rusting away because there is no money to maintain it.
History will record this locomotive purge in the wake of the biggest economic boom the country has experienced. Name me one other industry that goes backward in a growing economy? Hint? The buggy whip industry.
The ultimate goal though is No locomotives & No employees! You’re almost there keep it up!
According to this piece, it sounds like NS has not indicated which of the nine different locomotive models are being retired/eliminated (SD-60s? Dash 8-40cs, etc.). A few years ago (2014/2015?), NS bought some second-hand ex BN SD-40-2s, and UP SD-90MACs, presumably these model types are on the chopping block? Also, all of the remaining ex N&W and Southern high-nose SD-40-2s?
A “buying opportunity” for shortline/regional carriers (Pan Am RR & others?) for motive power, if they are in the market for such power. Agree with Bill’s suggestion below that it would be nice for NS to donate a couple of these retired models for area museums (Altoona, Roanoke, St. Louis, Union, Ill. , etc.).
Show a little “charity” NS!
BILL, do you have any information on which models are being “rationalized”?