Norfolk Southern Corp. (NS), Norfolk, Va., announced plans to consolidate its three operating regions into two, effective March 15, to enhance operating efficiencies, reduce costs, drive profitability and accelerate growth. NS is targeting annual expense savings of $650 million by 2020.
“We are committed to aggressively controlling costs while delivering the high levels of superior service that our customers value,” says Mike Wheeler, executive vice president and chief operating officer. “Consolidating our operating regions will generate productivity savings, not only through right-sizing, but also by leveraging advancements in train dispatch technologies that support more fluid and efficient movement of freight across the network. As we continue to execute on our 5-year strategic plan, we are confident that these steps will make Norfolk Southern a faster, lower-cost and more profitable railroad.”
Earlier this year, NS streamlined division operations by combining the former Virginia and Pocahontas divisions into a larger Pocahontas division. This became effective Feb. 1, and followed other key strategic initiatives, including the reduction from three corporate office locations to two, restructuring of the Triple Crown Services subsidiary, integration of the D&H South Line to increase options for shippers and idling of certain parts of the ‘West Virginia Secondary’ line.
NS’s network spans 22 states in the eastern United States. The railroad presently manages train operations across 10 operating divisions that are part of three larger operating regions – the Eastern, Western and Northern regions.
Under the new structure, NS’s network will be divided into Northern and Southern regions only. The Northern Region will include the Harrisburg, Pittsburgh, Dearborn, Lake and Illinois divisions. Greg Comstock, a 41-year veteran of Norfolk Southern operations, will be the region’s general manager. The region’s chief engineers will be Eddie Otey, maintenance of way and structures, and Mick Ireton, communications and signals. The Southern Region will include the Piedmont, Alabama, Georgia, Central and Pocahontas divisions. Todd Reynolds, a 22-year veteran of Norfolk Southern operations, will be the region’s general manager. The region’s chief engineers will be Lucious Bobbitt, maintenance of way and structures, and Randall Smith, communications and signals.
Each of the two consolidated regions will support approximately 1,000 daily crew starts for long-haul train operations, connecting customers and communities to global markets with freight rail that moves consumer goods, automobiles, coal, grain and products essential to U.S. households, businesses and industries.