Tuesday, January 12, 2016

Norfolk Southern slimming down a bit

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NS Senior VP and COO Mike Wheeler NS Senior VP and COO Mike Wheeler

Most likely to assist in heading off Canadian Pacific’s next move toward an acquisition, Norfolk Southern announced on Jan. 12, 2016 that it is consolidating two of its divisions and shutting down portions of one secondary line as “part of the company’s ongoing drive to enhance operating efficiencies and support long-term growth.”

NS is folding its Virginia Division into its Pocahontas Division, with headquarters in Roanoke, Va., effective Feb. 1. The railroad also is changing traffic patterns and idling parts of its West Virginia Secondary, a 253-mile line between Columbus, Ohio, and central West Virginia that it says “has experienced steady declines in business in recent years.” This follows the idling of a 33-mile main line between Elmore and Princeton, W.Va., in September 2015.

“The consolidation is part of the company’s ongoing drive to enhance operating efficiencies and support long-term growth,” NS said. “This announcement follows other recent strategic initiatives, including the reduction from three corporate office locations to two, restructuring of the Triple Crown Services subsidiary, and integration of the D&H South Line to increase options for shippers.”

The revamped Pocahontas Division will comprise 2,581 route-miles, mainly in Virginia and West Virginia, extending from the Port of Virginia to Portsmouth, Ohio, and from Bristol, Va., to Hagerstown, Md. “Creation of the new Pocahontas Division supports the railroad’s strategic plan to deliver cost-efficient and superior service while building a stronger enterprise,” said Senior Vice president Operations Mike Wheeler. “Consolidating the two divisions enables us to streamline operations and focus resources on high-return growth opportunities. Combining the divisions will improve service by placing most of the company’s coal routes under the operating authority of a single division. Additionally, the move further consolidates operational control over our Heartland Corridor, a doublestack intermodal route through Virginia, West Virginia, and Ohio.”

Roanoke, which will serve as headquarters of the new Pocahontas Division, currently is headquarters of the Virginia Division. The new division will be led by Superintendent Charles M. “Mike” Irvin, a 33-year employee with wide experience managing several different divisions for the railroad. In Roanoke, Norfolk Southern currently operates a local switching yard, locomotive and railcar maintenance and overhaul facilities, and a material yard that supports track maintenance gangs system-wide.

The consolidation will affect management and office staff positions now based in Bluefield, W.Va., currently the Pocahontas Division headquarters. Those employees will have an opportunity to relocate to Roanoke or apply for other positions at NS. With the consolidation, Norfolk Southern will operate 10 divisions across its network.

NS will continue to operate its rail yard in Bluefield. Trains moving Appalachian coal comprise most of the business handled there, and yard traffic has declined as coal volumes moved by the railroad have dropped over the past five years. Currently, about 130 people work in operations departments at the yard, including transportation, engineering, and mechanical.

“Coal mined from the Appalachian Basin has long served as a vital, low-cost source of energy to power America, and Norfolk Southern remains committed to providing top-notch service to our valuable coal customers,” Wheeler said. “At the same time, the railroad is nimble and adapts to changing market conditions. Our strategic plan positions us to meet the needs of current customers while creating efficiencies and focusing resources on infrastructure and markets that support continued growth.”

For example, Wheeler noted that the Heartland Corridor, opened in 2010 as part of a public-private partnership among Norfolk Southern, Virginia, West Virginia, Ohio, and the federal government, “created the shortest, most efficient, and environmentally friendly route to transport intermodal freight between the Port of Virginia and Midwest consumer markets.” This year, Norfolk Southern trains will begin serving the new Heartland Intermodal Gateway in Prichard, W.Va., the state’s first intermodal facility, which was developed through the corridor partnership.

“The Heartland Corridor opens global trade markets for West Virginia, Kentucky, and Ohio businesses, creates opportunities for jobs and economic expansion, and supports the railroad’s efforts to shift freight from highway to rail,” Wheeler said. “The Heartland Corridor is a vital part of the U.S. transportation network. As we help communities and businesses compete in the global marketplace, we are building a stronger future for Norfolk Southern and our shareholders.”

In Virginia and West Virginia, Norfolk Southern in 2014 employed 5,690 people and funded a payroll of $450 million, invested $235 million in track and facilities, and spent $278 million in purchases and payments with suppliers and local businesses.

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