(The following story by Gregory Richards appeared on The Virginian-Pilot website on May 11.)
WILLIAMSBURG, Va. — Norfolk Southern Corp. Chairman Wick Moorman said Thursday that he expects the national economy to rebound in the second half of the year, boosting the railroad’s freight shipments that have slipped year-over-year for the last two quarters.
When that resurgence occurs, the Norfolk-based railroad will be ready, he said, citing aggressive hiring last year and more than $1.3 billion allocated this year to spend on new track and locomotives.
“Our primary goal continues to be getting ready for the higher volume of freight traffic” that should be returning soon, Moorman said at the company’s annual shareholders meeting at the Williamsburg Lodge.
click here
Railroads are a good barometer of the overall economy because they move many of its parts – including steel, coal and autos, and even imported clothes and electronics.
Despite the cooling economy, freight shipments remain high compared with historical levels, said Moorman, who is also Norfolk Southern’s president and chief executive. And, he said, the factors that caused the railroad industry’s recent resurgence remain in place: higher fuel costs, which make locomotives more competitive than trucks; a shortage of truck drivers; and highway congestion.
Moorman also warned the several dozen Norfolk Southern officials and shareholders in attendance that the country faces a looming “transportation crisis” as demand outpaces the capacity to move freight.
To ease the crisis, Moorman advocated legislation proposed by U.S. Sen. Trent Lott, R-Miss., that would provide a tax credit for investments in railroad infrastructure, such as tracks and terminals.
Railroads have invested “huge sums” to increase capacity in their systems, but assistance from public bodies is still needed, he said. Norfolk Southern is working with Virginia to improve its rail lines along congested Interstate 81 in the western part of the state in hopes of diverting truck traffic.
At the meeting, shareholders re-elected four directors: Alston D. Correll, a former chairman of Georgia-Pacific Corp.; Landon Hilliard, a banker with Brown Brothers Harriman & Co. in New York; Burton M. Joyce, chairman of steel producer IPSCO Inc.; and Jane Margaret O’Brien, president of St. Mary’s College of Maryland. KPMG LLP was approved as the railroad’s auditors.
Four shareholders posed questions to Moorman on such topics as the possibility of leasing air space over rail yards, oil prices, and how Norfolk Southern might be affected by this week’s sale of a Florida railroad that transfers cargo with Norfolk Southern. One man from Yonkers, N.Y., complimented Norfolk Southern’s office staff for being “very nice” when he calls to ask them questions.