Railroad Revival: Norfolk Southern Back on Track
After a tumultuous year, Norfolk Southern is celebrating a major turnaround. CEO Mark George and his executive team shared the good news on the fourth-quarter earnings call, highlighting the railroad’s impressive operational improvements.
Efficiency and Speed
The numbers speak for themselves: a 10% boost in average train speed, a 15% reduction in terminal dwell, and a 20% cut in unplanned recrew rates. These changes have resulted in a remarkable $300 million in cost savings, exceeding the target set in the spring. The railroad’s network is running faster and more efficiently than ever, with service metrics stronger than they’ve been in years.
Safety First
Norfolk Southern’s safety record has also seen significant improvement. The overall Federal Railroad Administration train accident rate decreased by 27% for the year, while the mainline accident rate declined by 44%. Although the personal injury rate rose by 5%, the railroad remains committed to prioritizing safety.
Precision Scheduled Railroading 2.0
The NS Precision Scheduled Railroading 2.0 operating model has been instrumental in delivering both efficiency and service improvements. Chief Operating Officer John Orr attributes the success to the model’s ability to streamline operations and enhance customer experience.
Strong Finish to the Year
The fourth quarter saw a 3% increase in overall volume, driven by a 5% rise in intermodal traffic. Merchandise volume remained flat, while coal was down 1%. Despite uncertainty surrounding potential tariffs, the railroad is confident in its ability to recapture market share.
Looking Ahead
In 2025, Norfolk Southern expects 3% revenue growth, $150 million in productivity savings, and a 1.5-point improvement in operating ratio. The capital plan includes $2.2 billion in spending, and the railroad will resume share buybacks this quarter.
United and Focused
CEO Mark George praised the board’s unity and commitment to the management team and the Better Way strategy. With a focus on consistency and resilience, Norfolk Southern is poised for continued growth and success.
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