(The following story by Peter Hull appeared on the Daily Press website on December 11.)
NORFOLK, Va. — Norfolk Southern Corp. plans to buy 100 new locomotives next year, as the nation’s No. 4 freight rail company remains optimistic of continued growth in its cargo business.
The new six-axle locomotives, the same number purchased last year, will take the Norfolk-based company’s fleet to about 3,500 engines. Norfolk Southern also will upgrade or decommission an undisclosed number of engines and rail cars as part of its $810 million capital improvement plan for 2004.
Recent years have seen Norfolk Southern target trucking businesses in an effort to increase its share of the freight handling market. That push prompted the company to buy twice as many new locomotives last year compared to 2002. Its decision to buy another 100 engines in 2004 reaffirms its position, the company said.
“That’s still the goal,” said Susan Bland, company spokeswoman. “A lot of the freight that goes by truck can go by rail,” she said, “and does.”
Equipment spending accounts for almost 32 percent – or $258 million – of the spending plan. The company plans to devote nearly $178 million on new and upgraded engines, and $42 million for computer systems and information technology projects.
“Our capital spending budget reflects our commitment to providing the highest levels of service and safety for our customers, and to utilizing our equipment and facilities efficiently,” said David R. Goode, Norfolk Southern chairman, president and CEO.
Next year’s plan represents a 1.5 increase from capital spending budgeted this year.
Aside from the new locomotives, the company will spend $384 million on rail and bridge improvement programs, $29 million on communications and signal projects and $16 million on environmental projects.
Business and industrial development initiatives total $64 million, and will include equipment to add capacity to the company’s intermodal network. Intermodal is the system of transporting freight by a number of modes – sea, rail, air or road – often by more than one carrier.
In recent years the company expanded container-transfer facilities in Atlanta, Cleveland and Harrisburg, Pa. Intermodal cargo containers has proved a thriving business for Norfolk Southern, with revenues reaching $315 in the its most recent quarter, an increase of 1.6 percent for the same period last year.
Norfolk Southern operates about 21,500 miles of rail lines in 22 states, the District of Columbia and Canada.