Associations representing railroad shippers say they’re concerned about Ancora Holdings’ proxy battle at Norfolk Southern, fearing that the activist investors will put an emphasis on boosting short-term profits at the expense of service.
“Seems as if NS is making strides on improving service which, to a certain degree, means abandoning some of the Precision Scheduled Railroading practices, and focusing more on capital improvements, its employees, shippers, and ultimately the end-consumer,” says Ann Warner, a spokeswoman for the Freight Rail Customer Alliance, National Industrial Transportation League, and the Private Railcar Food and Beverage Association. “However, this proposed new leadership slate seems to be an excessive reaction to what may be a brief rise in NS’ operating ratio where they are only interested in short-term gain rather than what is needed in the long run for NS to better serve its customers and its investors.”
The FRCA is an umbrella group of trade associations representing more than 3,500 chemical, manufacturing and agriculture companies, electric utilities, and their customers. The NITL represents shippers’ interests in all modes. The PRFBA represents 17 food and beverage companies, including General Mills, MolsonCoors, KraftHeinz, and Tropicana.
Railroad unions and federal regulators also have said they back the current NS management team and its long-term service resiliency strategy.
Ancora, which launched its proxy battle to gain control of the NS board and oust CEO Alan Shaw and Chief Operating Officer Paul Duncan last month, has been highly critical of the railroad’s response to the Feb. 3, 2023, hazardous materials derailment in East Palestine, Ohio, as well as NS’s lagging financial and operational performance.
Ancora has touted former UPS executive Jim Barber as NS CEO and former CSX operating chief Jamie Boychuk as NS chief operating officer.
NS shareholders ultimately will decide the matter. A vote tally will be announced at the railroad’s annual general meeting which is typically held in May but has yet to be scheduled.
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