NS continued to become more fluid this month, as average train speed was up 15 percent and terminal dwell was down 11 percent compared to the fourth quarter, Chief Operating Officer Mike Wheeler said on the railroad’s earnings call on Thursday.
“This has been achieved by a healthier [train and engine] crew base, clean sheeting gaining further traction, the full implementation of our network operations center, and intense energy and execution by the field,” Wheeler says.
The railroad is now moving faster than it has in nearly two years, according to data NS reports to the Association of American Railroads. The railroad began to bog down more than a year ago in the Southeast amid crew shortages and volume growth that plugged terminals and single-track main lines.
NS began the clean-sheeting process last year to redesign local and yard service. The process accelerated in the fourth quarter, Wheeler says, and will be completed by mid-summer.
Then NS will launch its new operating plan, which will be based on the principles of Precision Scheduled Railroading. The railroad is phasing in operational changes now, however, where it makes sense to do so, Wheeler says.
NS completed the move of its dispatchers to its new operations center in Atlanta last month, which it says helps improve coordination as trains move across the system.
“There is a lot of urgency around here and a lot of enthusiasm, energy, and excitement about this new mode of operations we are adopting based on Precision Scheduled Railroading,” CEO Jim Squires says.
NS brought in consultants last year with PSR experience, Squires noted, and hired one of them, Michael Farrell, as senior vice president of transportation, in November.
“It’s working. You see it in the service metrics thus far in the first quarter in the latter part of the fourth quarter as well,” Squires says. “So it’s clearly taking hold. We feel like there’s a lot of momentum.”
Federal regulators have raised questions about the way Class I railroads are implementing the late E. Hunter Harrison’s PSR operating model.
NS, like Union Pacific and CSX Transportation, has notified customers about changes to demurrage and accessorial charges, which the railroads levy on shippers for things such as car storage, special switching requests, and releasing freight cars with incomplete shipping instructions.
The changes are designed to encourage shippers to more quickly load and unload railcars.
Chief Marketing Officer Alan Shaw says NS is collaborating with customers and working with them to make operations more efficient so that both shippers and the railroad benefit.
“They want us to succeed and they want a supply chain partner that can support their growth. And so their goals are aligned with ours,” Shaw says. “We’re focused on improving service and also putting a product out there that lets them compete.”
NS does not expect a revenue windfall from the new charges, executives say.
The railroad will provide full details on its new operating plan, service metrics, and financial targets at an investor day scheduled for Feb. 11 in Atlanta.
