(The following article by Ray Reed was posted on the Roanoke Times website on January 26.)
ROANOKE, Va. — Work has begun to upgrade the Heartland Corridor to the Midwest.
Norfolk Southern Corp. reported a 37 percent profit increase Wednesday for the fourth quarter, along with a slate of positive numbers that retiring Chairman David Goode said also means good news for the Roanoke region.
“When business is good for Norfolk Southern, as it certainly was in fourth quarter and we expect it to be in 2006, that’s good for the valley,” Goode said.
He declined to be specific about what the railroad might do in the Roanoke region.
But NS has begun work to upgrade the Heartland Corridor, a rail route from Norfolk through Roanoke to the Midwest, Goode said.
Tunnel clearances in West Virginia are being raised to allow cars with double-stacked containers to pass through, boosting the intermodal traffic that is NS’ fastest-growing segment of the transportation market.
Intermodal shipping uses containers that can be hauled by truck, rail or ship. Merchandise arriving in Norfolk by container ship can be loaded, still in its containers, onto trucks or trains and hauled inland.
Revenues from intermodal freight rose 18 percent to $519 million in the fourth quarter. For the year, intermodal reached $1.8 billion, a 19 percent increase over 2004.
Besides the Heartland Corridor, Roanoke figures into NS’ plans for increasing its intermodal traffic along the Interstate 81 corridor, Goode said.
NS is acquiring a rail route that connects to Texas and possibly Mexico, pending regulatory approval, Goode said.
“A lot of the business that moves up and down the I-81 corridor is business that moves to the Southeast and goes beyond that to Texas and Mexico,” Goode said.
“So, as we increase volumes of intermodal movement and add corridors that we can reach, like this one, it plays right into our I-81 strategy, in which Roanoke is a key piece.”
NS has a development team focused on intermodal traffic for the Heartland Corridor, Goode said. It “has been working aggressively to do advanced planning,” he said. “Beyond that, it would be premature for me to say much more.”
Congress in July appropriated $90 million for the Heartland project through Virginia, West Virginia and Ohio. Of that, $5 million is earmarked for Virginia.
The Heartland concept calls for NS to build intermodal freight yards in the Roanoke Valley and in Prichard, W.Va., so that freight containers can be transferred between trucks and rail cars.
Goode and Chief Executive Officer Wick Moorman have their eyes on grabbing a share of trucks’ freight traffic.
Moorman, 53, will succeed Goode, 65, when he retires as chairman Wednesday.
Moorman said a shortage of truck drivers, increased highway congestion and rising fuel prices are causing more shippers to use rail.
NS shares exceeded their 52-week high at $47.64 on the New York Stock Exchange on Wednesday, up $1.84 or 4 percent. Trading was heavy, at 5 million shares compared to the normal 2.3 million.
NS’ operating ratio, a measure watched closely by analysts, was up 2.6 in the fourth quarter, to 73.7. The ratio compares operating expense to net revenue, and for the full year NS’ ratio rose 1.5 to 75.2.