NS adopts tougher quality standards

Norfolk Southern has graduated its third Six Sigma class. The 23-member class included employees from the Transportation and Mechanical departments, who were trained for job-specific projects.

The company adopted the Six Sigma business strategy in its efforts to achieve world-class customer service standards. Six Sigma uses statistical analysis to improve processes, eliminate variation and reduce costs. Six Sigma quality means 99.9997 percent reliability, or only 3.4 defects per million opportunities. For railroad operations, the process can lead to faster cycle times, better equipment utilization and more reliable transit schedules, all of which benefit railroad shippers and receivers.

"The world is moving toward ISO 9000 and Six Sigma quality levels, and as a link in the global logistics chain, we have to set our sights accordingly," said John M. Samuels, senior vice president Operations Planning and Support. "Customers tell us they want more consistent service and less variability. When we deliver that, we'll move closer to our vision of being the most customer-focused transportation company in the world."

NS' transportation operations, major mechanical shops and a number of other areas already are certified to ISO 9002:1994 standards and now will be upgraded to reflect the more recent ISO 9001:2000 standards. ISO is the internationally recognized quality measurement that certifies that the customer's voice is reflected in business processes and that those processes are continually improved.

"Six Sigma will take us to the next level in terms of quality and efficiency," said Jeff G. Yates, assistant vice president Quality Management and leader of NS' ISO registration process. "It builds on what we've accomplished in the 10 years since the implementation of our Thoroughbred Quality Management process. One day it will simply be 'the way we work.'"

NS employee honored for environmental contributions

In ceremonies at the U.S. Capitol last month, Mechanical Supervisor Paul Contrado accepted the John H. Chafee North American Railroad Employee Environmental Excellence Award for his contributions to protecting the environment. The award is given by the Association of American Railroads.

Paul Contrado (right) accepts his award from Sen. Lincoln Chaffee.

The award is given in honor of John H. Chafee, a leading environmentalist who understood and promoted the environmental advantages of rail transportation. His son, Sen. Lincoln Chafee of Rhode Island, gave the keynote address at the awards ceremony.

Contrado, based at Lambert's Point, Norfolk, has worked to ensure that wastewater from locomotive shops is cleaned before discharge. This has earned the terminal several environmental awards. He developed and implemented a program to recover and recycle coal that otherwise would have been wasted when hoppers are repaired. He also helped design a storm water collection treatment system that has been nominated for several environmental compliance and design engineering awards.

Contrado is actively involved in a local Elizabeth River project that has been cited by the Environmental Protection Agency as an outstanding example of what public and private cooperation can do to improve swimming and fishing in urban waters.

Quarterly dividend declared

Norfolk Southern Corporation announced the regular quarterly dividend of 6 cents per share on its common stock, payable on June 11 to stockholders of record on May 4.

First-quarter results reported

Norfolk Southern announced first-quarter income from continuing operations of $61 million, or $0.16 per diluted share, compared with $14 million, or $0.04 per diluted share, in the first quarter of 2000, which excluded the cost of a work-force reduction program.

"We're encouraged with our progress in the first quarter in light of the difficult and uncertain economic climate," said David Goode, Norfolk Southern chairman, president and chief executive officer. "We are increasing capacity and introducing new services while at the same time continuing to drive out expenses."

Reported net income for the first quarter was $74 million, or $0.19 per diluted share, reflecting an after-tax gain of $13 million, or $0.03 per share, related to the 1998 sale of Norfolk Southern's former trucking subsidiary, North American Van Lines, Inc. For the comparable period in 2000, reported results were a net loss of $48 million, or $0.12 per diluted share, and included an after-tax work-force reduction charge of $62 million, or $0.16 per diluted share.

Railway operating revenues in the first quarter were $1.54 billion, 2 percent higher compared with operating revenues of $1.51 billion in the first quarter of 2000. Coal revenues increased $46 million, or 13 percent, to $393 million, driven by increased electricity generation and the replenishing of stockpiles by utilities. Strong utility demand reduced the supply of export coal, which resulted in a decrease in export coal revenues. Intermodal revenues increased $30 million, or 12 percent over the first quarter 2000, to $276 million, strengthened by increased domestic container business. General merchandise revenues declined $44 million, or 5 percent, to $871 million, primarily due to cutbacks in automotive production, which also impacted metals revenues.

First-quarter railway operating expenses were $1.34 billion in 2001, down 3 percent compared with $1.38 billion in 2000, excluding last year's work-force reduction charge. The decline largely was due to reduced compensation and benefit costs.

"Our restructuring initiatives are beginning to generate momentum," Goode said. "As we move ahead, we will continue to take the necessary steps to deliver the service our customers deserve and the returns our investors expect."

For the quarter, the railway operating ratio improved to 86.7 percent, compared with 91.4 percent in 2000, excluding the cost of a work-force reduction charge.

Railroad Retirement bill introduced in Senate

The Railroad Retirement and Survivors' Improvement Act of 2001 was introduced in the U.S. Senate April 4 with 36 co-sponsors. S. 697 is identical to last year's bill and contains all the benefit improvements originally agreed to by rail management and labor. Key provisions include improvements to surviving spouse benefits, full retirement annuity at age 60 with 30 years of service, elimination of artificial caps on benefits, vesting after five years instead of 10 and requiring carriers to ensure future fund solvency with tax increases if necessary. Associated with the bill, but not part of it, is a provision to allow some private investment of Railroad Retirement funds.

To show your support for S. 697, contact your senators.

Team works to eliminate billing disputes

A team of Norfolk Southern employees is working to eliminate billing disputes.

Led by Wes Alexander, director Agency Operations Center, the Customer-Facing Improvement Team includes members from Marketing, Sales, Revenue Accounting Customer Service, the Agency Operations Center, Centralized Yard Operations, Industrial Engineering, Operations Research, Information Technology, Intermodal Billing and Data Quality.

"All of these functions touch our customers in one way or another," said Alexander. "Bringing the experience and expertise of our team members together will help us improve the quality of our work, add value for our customers and reduce costs."

The initial analysis of NS' billing process took place as part of NS 21, the ongoing study of the company's business processes to improve customer service and reduce costs as the company enters the 21st century. It indicated that eliminating billing disputes would produce significant benefits for NS customers, employees and shareholders.

The team is tackling a number of issues related to eliminating billing disputes. Among them are increased use of electronic data interchange bills of lading, demurrage billing accuracy and processes, rate simplification, waybill accuracy, duplicate billing and intermodal billing accuracy.

Each issue is being analyzed by a sub-team. "Our sub-team members are involved in customer service in many ways every day and are well qualified to analyze and make suggestions about how to improve our billing processes," said Alexander. Alexander said team members are looking at using new desktop technologies to strengthen some existing processes.

"As an example, our marketing representatives must use multiple mainframe systems to quote and establish rates for customers," he said. "Rate information is often entered multiple times in multiple programs, creating opportunity for error or omission. To make the process consistent, we might consider using Web-based technology where rate information could be entered once and be available for all NS departments that need to access it."

Over the next few months the Customer-Facing Improvement Team will look closely at all aspects of NS billing and recommend ways to improve it.

"We have a formidable goal, but I know we have the right people working together to accomplish it," said Alexander. "We can and will improve the quality of our work, add value for our customers and reduce costs."

NS, BNSF provide coast-to-coast service

Norfolk Southern and the Burlington Northern and Santa Fe Railway have partnered to provide coast-to-coast intermodal service for container loads of freight between California and the East Coast.

Double-stack container service connects NS markets in Pennsylvania, New York, New Jersey and other Mid-Atlantic States with BNSF points in Southern California. The new service is designed to bypass all Chicago-area intermodal facilities, running to and from Harrisburg. It eliminates rubber tire cross-town transfers and terminal handling in Chicago and at least one day of transit time.

Eastbound and westbound service is available from Los Angeles, San Diego and San Bernardino, Calif., to Harrisburg, Morrisville, Bethlehem and Ameriport, Pa.; ERAIL, Dockside and Croxton, N.J.; Baltimore; and Norfolk.

"By offering a run-through service that eliminates Chicago cross-town truck transfers, this integrated rail service increases reliability between major markets in the Northeast and Southern California," said Mike McClellan, vice president, Intermodal Marketing. It will provide a higher level of service quality to our existing customers and give highway shippers an excellent alternative."

25th annual DARS Jubilee June 15 - 17

Norfolk Southern's Drug and Alcohol Rehabilitation Services (DARS) annual Jubilee is set for June 15 - 17 at the Wyndham Roanoke Airport Hotel. This year's jubilee is the 25th such event for the program.

Hotel room rates are $79. Room reservations must be received by the hotel by May 31. To reserve a room, call 1-800-996-3426 or (540) 563-9300. Ask for the Norfolk Southern DARS Jubilee group rate. This rate is available to those who wish to stay a few extra days.

The jubilee features an ice cream social, a banquet and dance and a number of speaker meetings.

To join in the fellowship and sharing of recovering railroaders and their families, contact Jack Scott, manager DARS at 757-629-2447 or via MEMO at JCSCOTT. You can register via the Internet here.

Quick action saves life

Engineer James Stultz Sr. and Conductor Greg King, both of Roanoke, were on their way to work when Stultz fell ill. King insisted they go to the hospital, as Stultz previously had heart problems. It was a good thing they did, because Stultz suffered a heart attack at the hospital, requiring CPR. Stultz, in a letter to Norfolk Southern Chairman, President and Chief Executive Officer David Goode, said, "Our lives are comprised of rules of conduct, safety rules, work rules, union rules. Too often, we overlook the Golden Rule…because of Greg's concern for me, I am alive today."

Capacity, employment boosted at Enola Yard

Norfolk Southern plans to quadruple the switching capacity of Enola Yard, near Harrisburg, Pa. The project enables NS to streamline routings between certain origins and destinations, while enhancing the quality of service it offers. Work began in April and take approximately two months to complete. The company estimates that 15 new jobs will be created as a result of the project.

"This project symbolizes Norfolk Southern's aggressive pursuit of freight business moving between the Northeast and the South and further solidifies Harrisburg's position as a major freight hub for the Mid-Atlantic," said David Brown, general manager of the company's Northern Region, with headquarters in Harrisburg. "Shippers should realize immediate benefits from the capacity increase at Enola, including improved transit times and equipment utilization."

Currently, Enola Yard is able to sort 125 rail cars daily. Following completion of the project, the yard will process 600 rail cars daily. The project involves rehabilitating nearly 28 miles of track and replacing 10 miles of railroad ties. The project cost of $1.9 million is included in NS' 2001 capital improvement program.

Since acquiring its portion of Conrail in 1999, Norfolk Southern has committed more than $340 million to projects throughout the Common-wealth of Pennsylvania, including approximately $47 million in the Harrisburg area.

Lafayette, Ind., railroad relocation project completed

A celebration on April 6 marked the completion of the Lafayette, Ind., rail relocation project. Work on the project began 30 years ago. The community worked with Norfolk Southern to relocate its lines through the city and close 41 highway-rail grade crossings. The new corridor runs along the Wabash River, away from the middle of town.

The first train ran over the new line in January. On April 6, city officials and guests boarded the final train to ride through town, stopping at the last three highway-rail grade crossings to officially close them.

"So many have worked so hard and so long to reach this important day for NS and the city of Lafayette," said Jeff Sliger, Illinois Division superintendent. "The community and the railroads can be proud of this monument to cooperation and safety."