Norfolk Southern makes more cutbacks as coal slump continues

Norfolk Southern Corp. (NYSE: NSC) announced April 20 that it will reduce train operations at its Knoxville, Tenn., rail yard, effective May 1.

This action is in response to lower traffic volumes and is consistent with the company’s ongoing implementation of its strategic plan to enhance operating efficiencies, reduce costs, drive profitability, and support long-term growth. The company has been hit, among other things, with a continuing slump in coal traffic.

NS plans to idle switching operations at the rail yard, where freight cars from inbound trains are sorted by destination and assembled into outbound trains. As part of the change in operations, train traffic will decrease at the yard, reducing the need for personnel and infrastructure associated with train operations and maintenance activities. The Knoxville terminal will continue to serve as a hub for through-train operations.

Knoxville will continue to serve as headquarters for the company’s Central Division, which includes 1,100 track miles primarily in Tennessee and Kentucky. Although approximately 135 positions will be impacted by the reduction of operations at the yard, nearly 300 employees in Knoxville will continue to support division operations and manage yard traffic.

NS currently employs more than 1,570 people across Tennessee with nearly 850 miles of track across the state, intermodal terminals in Memphis, and a major rail classification yard and locomotive shop in Chattanooga.

The April 20 announcement is part of other recent initiatives in NS’ five-year strategic plan to implement cost control initiatives and network improvements, including:

  • Consolidating two operating divisions in West Virginia and Virginia, idling a major Lake Erie coal terminal, and discontinuing operations on some coal routes in Central Appalachia, all in response to changes in the coal business;
  • Restructuring the company’s Triple Crown Services subsidiary;
  • Realigning operating regions from three to two; and
  • Consolidating corporate office locations.

NS is one of the nation’s premier transportation companies. Its 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.