Norfolk Southern consolidates two divisions as coal movements lag

Norfolk Southern Corp. (NYSE: NSC) said Jan. 12 that it is consolidating its Virginia and Pocahontas divisions, which are at the heart of its badly-hit coal-hauling operations, to form the new Pocahontas Division, with headquarters in Roanoke, Va., effective Feb. 1.

The consolidation is part of the company’s ongoing drive to enhance operating efficiencies and support long-term growth. This announcement follows other recent strategic initiatives, including the reduction from three corporate office locations to two, restructuring of the Triple Crown Services subsidiary, and integration of the D&H South Line to increase options for shippers.

In a related move, Norfolk Southern said it is changing traffic patterns and idling parts of its “West Virginia Secondary,” a 253-mile line between Columbus, Ohio, and central West Virginia that has experienced steady declines in business in recent years. This follows the idling of a 33-mile mainline between Elmore and Princeton, W.Va., in September 2015.

The new Pocahontas Division will cover 2,581 route miles, mainly in Virginia and West Virginia, extending from the Port of Virginia to Portsmouth, Ohio, and from Bristol, Va., to Hagerstown, Md. “Creation of the new Pocahontas Division supports the railroad’s strategic plan to deliver cost-efficient and superior service while building a stronger enterprise,” said Mike Wheeler, senior vice president operations. “Consolidating the two divisions enables us to streamline operations and focus resources on high-return growth opportunities.”

Combining the divisions will improve service by placing most of the company’s coal routes under the operating authority of a single division. Additionally, the move further consolidates operational control over the company’s Heartland Corridor, a double-stack intermodal route through Virginia, West Virginia, and Ohio.

Roanoke, which will serve as headquarters of the new Pocahontas Division, currently is headquarters of the Virginia Division. The new division will be led by Superintendent Charles M. “Mike” Irvin, a 33-year employee with wide experience managing several different divisions for the railroad. In Roanoke, Norfolk Southern currently operates a local switching yard, locomotive and rail car maintenance and overhaul facilities, and a material yard that supports track maintenance gangs systemwide.

The consolidation will affect management and office staff positions now based in Bluefield, W.Va., currently the Pocahontas Division headquarters. Those employees will have an opportunity to relocate to Roanoke or apply for other positions at the company. With the consolidation, Norfolk Southern will operate 10 divisions across its network.

The company will continue to operate its rail yard in Bluefield. Trains moving Appalachian coal comprise most of the business handled there, and yard traffic has declined as coal volumes moved by the railroad have dropped over the past five years. Currently, about 130 people work in operations departments at the yard, including in transportation, engineering, and mechanical.

“Coal mined from the Appalachian Basin has long served as a vital, low-cost source of energy to power America, and Norfolk Southern remains committed to providing top-notch service to our valuable coal customers,” Wheeler said. “At the same time, the railroad is nimble and adapts to changing market conditions. Our strategic plan positions us to meet the needs of current customers while creating efficiencies and focusing resources on infrastructure and markets that support continued growth.”

The company’s Norfolk Southern Railway subsidiary operates approximately 20,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal, automotive, and industrial products.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.