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NS ‘Reimagines Possible’

April 2019

Carman Dan Cremeans and Dan Potter tack welding
Carman Dan Cremeans, standing, uses a bar to align a tub for co-worker Dan Potter to tack weld into place during retub work at the Portsmouth Car Shop.

Rail car ‘retub’ program: A sustainable business solution that achieves NS’ strategic plan goals

Late last year, as Norfolk Southern was preparing a strategic plan to transform railroad operations, the company quietly celebrated a milestone that joined past success with future promise.

In December, NS’ Mechanical Department completed work on an innovative “retub” program for the company’s Top Gon car fleet – the rail cars that move steel-making coal for domestic and export coal customers.

While launched five years ago – in 2014, amid a very different market landscape – the retub initiative achieves all five principles that underpin the strategic plan: serve the customer, manage assets, control costs, work safely, and develop people.

Chad Newsom aligns tub
During retub work, Chad Newsom, a carman at NS’ Portsmouth Car Shop, is pictured aligning a new tub for bolt application.

Faced with a need to renew its aging Top Gon fleet, NS outfitted existing cars with new steel tubs rather than buying new cars. In a volatile coal market – where buying too many new cars could have been a costly miscalculation – the retub strategy added at least five years of life at a fraction of the cost of buying new.

“Rather than going out and buying 5,000 or 6,000 new coal cars in an uncertain market, retubbing put us in a position where we could control our costs and our destiny – we could turn it on and off as needed,” said Jamie Williams, NS director mechanical operations and support. “We were able to serve our customers and put the retubs in an envelope that fit us the best.”

The bottom-line payoff: cost savings of nearly $357 million. The savings are based on the price of a new coal car, around $90,000, versus the cost of a retub, about $14,000.

The program also boosted NS’ top-line growth.

“Coal is a global market, with global uncertainty, and that requires us to be very flexible,” said Steve Ewers, assistant vice president service management. “The retubs allowed us to capture a lot of export business that we would not have otherwise been able to capture. At the same time, we really mitigated our capital costs. That’s the good news story about the retub program.”

NS Reimagines Possible

With its new strategic plan, rolled out in February, NS aims to “Reimagine Possible” in all aspects of business. Driven by precision scheduled railroading practices that streamline operations, the plan involves culture change in how the company operates its rail yards and runs trains across the network. The retub program reflects the innovative spirit in the railroad’s DNA, demonstrating how NS strives to continuously improve operations to meet ever-evolving business demands.

“With the retubs, we took equipment that otherwise would have been scrapped and came up with a plan that allowed us to quickly put it back in the lane and serving customers at a much lower cost,” Williams said.

The retub program involved collaboration among operations and marketing, a key component of the new strategic plan to align commercial and operational expertise to better serve customers and grow business.   

“It’s really a story about cost-effective management of our equipment fleet in a very dynamic and challenging market,” said Rob Zehringer, group vice president, coal. “This supports our entire coal franchise, not just the export market, and it’s helping us better manage on a cost-basis how we move forward in our equipment strategy.”

John Dougherty Monitors work
John Dougherty, a car repairer at Norfolk’s 38th Street Car Shop, monitors work as a tub is maneuvered into position during the retub work in Norfolk.

Craft employees help lead the way

From start to finish, NS car repairers at mechanical shops in Portsmouth, Ohio, and Norfolk, Virginia, installed new steel tubs in nearly 4,700 cars.

Employees at both shops worked on the retubs through 2015. NS idled the program in 2016 as demand for export coal dropped off, and then restarted it in 2017 at the Portsmouth shop, where it was completed.

“It ended up being a win-win for everybody,” said Ray Jones, who oversees the Norfolk car shop as NS director piers and facilities, based at Lamberts Point. “It met the needs of our customers, it allowed our people to do valuable work for us, and it extended the life of those cars to give the company what it needed as far as business conditions at the time.”

Knowing that safety is good business, employees who performed the retubs set an example of working safely – a strategic plan principle. At the Norfolk shop, employees extended their safety record to 10 years without a reportable injury while working on the program. During 2018, Portsmouth shop employees achieved more than 1.5 million employee-hours of service without a reportable injury.

As part of efforts to develop people under the new strategic plan, NS has involved frontline operations employees in creating “Clean Sheeting” plans to re-engineer and streamline yard operations. Similarly, the retub program provided a unique opportunity to develop people, said Brian Allen, manager car shop in Portsmouth, where around 70 carmen, machinists, and electricians work.

Because neither shop had ever undertaken a program like this, craft employees helped design an assembly-line process that reduced costs and enhanced efficiency and safety, he said.

“We listened to their ideas and incorporated their changes, and our employees could see the difference they were making,” Allen said. “It allowed the employees to think and to be confident in the creation of their ideas to where they are constantly looking at our other programs and figuring out better ways to do things for cost savings and productivity.”

“The employees really got involved in how to handle the tubs and the ergonomics and safety of it,” Jones said. “Norfolk and Portsmouth shared best practices with each other and then we had a friendly competition, and we were rolling those tubs out.”

Mark Winfrey, NS manager car maintenance, said Mechanical Department leaders initially expected the two car shops to complete about 400 retubs during the first six months of the program. To their amazement, shop employees churned out nearly 1,100.

“The employees spent a lot of time talking and making adjustments to find easier and faster ways of doing the work,” Winfrey said.

A collaborative effort

While mechanical led the effort, multiple departments collaborated to make the project a success, Winfrey said. NS sourcing, for example, played an important role in securing the vendors that supplied the needed parts and equipment. NS’ unit train group worked closely with fleet planning, operations, and marketing to coordinate the timing of the retubs and to ensure customers’ needs were being met. NS transportation coordinated the transport of Top Gon cars from around the system to the shops for retubbing.

“It was a good program,” Winfrey said. “A lot of people worked very hard on it.”