(The following article by Gregory Richards was posted on the Virginian Pilot website on July 20.)
NORFOLK, Va. — This year, Norfolk Southern Corp. will move the annual surge of freight that occurs every fall with its usual arsenal of additional locomotives, more employees and increased investment on its rail lines, according to a letter sent by the railroad to the U.S. Surface Transportation Board.
“We expect to handle the volumes we foresee in 2006 safely and efficiently,” Wick Moorman, Norfolk Southern’s chairman, president and chief executive officer, wrote to W. Douglas Buttrey, the Surface Transportation Board’s chairman.
Buttrey asked the country’s big freight railroads in late June to send him their strategies for moving the greater freight volumes that develop from mid summer through the fall, mainly from imported holiday goods being transported from docks to stores. Buttrey told the railroads he wanted those plans because rail line congestion already was developing, but rail traffic had not yet peaked. Those plans were to be received by Monday.
Norfolk-based Norfolk Southern, the country’s fourth-largest freight railroad, will have about 100 more locomotives this fall compared with the previous fall, according to the company. Also, the railroad will improve and expand its 21,200-mile rail network, including the route between Manassas and Harrisburg, Pa., for example, and more rail cars will be placed in service, Moorman wrote.
The company expects to spend $1.2 billion on such capital improvements in 2006.
Additionally, 2,570 conductors and engineers will be hired by the end of this year, according to Moorman.
Norfolk Southern expects “continued strong traffic volumes” this fall across its system, he wrote. In particular, its intermodal service of carrying shipping containers – the 20- to 40-foot-long metal boxes that can be switched between trains, trucks and ocean liners – is expected to post higher volumes than last fall.
A spokesman for the Surface Transportation Board did not respond to requests Wednesday for comment on Norfolk Southern’s submission.
Moorman also used the letter to address the railroad’s rates. He said he’s heard complaints from some Norfolk Southern customers that its rates are too high.
But railroads are the nation’s most capital-intensive industry, he wrote, and a “market-based approach” to rates is needed to pay for the improvements necessary for meeting customers’ increasing service and capacity demands.
“There is no free lunch,” Moorman wrote. “Without market-based adjustments to our rate structures, we cannot invest and expand to meet the ever-growing transportation demands of our many customers.”