Coal traffic continues to drop for Norfolk Southern

Written by David C. Lester, Managing Editor
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Norfolk Southern Pier 6 at Lamberts Point in Norfolk, Va.
Norfolk Southern

S&P Global Platts is reporting that both domestic and international coal shipments continue to decline on Norfolk Southern, yet NS is moving forward with optimism for greater efficiencies flowing from its revised approach to operations.

Alan Shaw, the railroads Executive Vice President and Chief Marketing Officer, speaking at an investment conference in Nashville yesterday, said the decline of coal allows the railroad to “look for every opportunity to provide value into the coal market because it is still important to us.” Shaw also said that coal “used to be 30% of our revenue. Now its less than 15% of our revenue.”

Efficiency improvements in coal transportation include a reservation system at Lambert’s point, the railroads huge port facility for coal exports in Norfolk, Va., along with some terminals connecting with short lines, according to Shaw.

Shaw added that “We’re continuing to look at [adding productivity] while recognizing the strengths that we’ve got in our intermodal and our merchandise franchises.”

Shaw pointed out that, in 2020, “We’re expecting continued softness. Just more broadly, I think you’re going to see progression next year. We’re going to continue to progress our implementation of PSR. We’re going to continue to progress our productivity, our pricing strategy, and our service product. And when the economy does turn around, we’re going to be in a great position to provide growth and strong operating leverage from that growth.

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