NS restores West Virginia service,
assists stricken communities

Mullens, W. Va., resident John Carr took these photos at the height of the flooding and after the floodwaters receeded.

Heavy rains swept through southern West Virginia on July 8, causing widespread flooding and heartache for Norfolk Southern and residents in McDowell and Wyoming counties.

Portions of a 90-mile section of track from Charleston to Elmore, W.Va., on the Pocahontas Division, were washed out by mudslides and littered with debris, making movement along the line impossible. The washouts ranged in length from 25 to 1,000 feet.

About 175 NS employees worked around the clock to reopen the line as quickly as possible.

A bridge in Deepwater, W.Va., began to shift under the force of rising waters, making it unsafe for traffic.

"Luckily, the foundation and substructure were not damaged," said Kevin Grigsby, superintendent, Bluefield, W.Va.

In addition to repairing the bridge, NS work crews rebuilt roadbeds washed away by floodwaters and mudslides.

"Access to some of these areas was difficult, but the lines were reopened at noon on Saturday, July 14," Grigsby said.

Water levels rose to over 10 feet in some places, washing away roads, homes, schools and businesses. The National Guard was called in to assist.

While NS worked to fix its own problems, the company reached out to help residents of the communities affected by the flooding. NS assisted with long-term relief in the form of interest-free loans to affected employees.

Pocahontas Division employees collected cleaning supplies, nonperishable foods, mops, buckets, rubber gloves and clothes. Pocahontas Land Corporation and its employees helped in numerous ways, from donating money to assisting with distribution of clothing to children and helping federal, state and local government agencies in their repair efforts. The Norfolk Southern Foundation donated $75,000 to the American Red Cross, with $50,000 earmarked for West Virginia, to help assist victims in a number of areas affected by recent flooding. The company challenged other companies servicing those areas to contribute also.

NS donated truckloads of water and bleach to the towns of Northfork and Mullens, which were hit hardest by the flooding.

"I don't know how else to describe it," Grigsby said. "The town of Mullens was destroyed."

Grain shuttle speeds service

A Norfolk Southern premium shuttle service for large grain mills has reduced transit times and provided more consistent, reliable service for shippers and receivers.

The company began the new service in May using dedicated 75-car trains to deliver corn from Midwest grain elevators to two Cagle's Farm feed mills and two Fieldale Farms facilities, all in Georgia. The trains are powered by three high-adhesion, six-axle locomotives and feature 286,000-pound capacity covered hoppers. The company previously used 50-car trains for this service.

"We've seen about a 50 percent reduction in cycle time," said Bob Ingram, product manager Corn. "We can use our resources more effectively by using the high-adhesion locomotives. Plus, the cars are dedicated to the specific customer and readily available."

Ingram said equipment is turned more quickly, requiring fewer grain cars, because the service requires loading and unloading within 24 hours of arrival at origin and destination.

"We've reduced the need for about 200 cars using this shuttle system," he said.

One of the Cagle's Farm facilities features a loop track nearly one mile long and power-assisted unloading equipment. A 75-car train can be unloaded in less than 11 hours, where previously it took 48 hours to unload 50-car trains. Cagle's built the track and installed the equipment for the new service.

The shuttle has made service more reliable and consistent, according to Charlie Rickman, Georgia division superintendent.

"We can schedule our crews more easily, because the equipment is there and ready for them. Our customers can almost set their clocks by our shuttle service," he said.

Ingram said, "We're working with other customers to bring this service to them. It's one more step forward in meeting and exceeding our customers' expectations for consistent, reliable service."

Line rationalization moves forward

Norfolk Southern's line rationalization program is moving forward as part of a restructuring announced in January.

The company has leased 200 miles of track to four short lines and has about 1,700 more miles progressing to final disposition or under active review.

"We've seen the migration and concentration of businesses to interstate corridors and metropolitan areas and away from rural areas," said Steve Eisenach, director Strategic Planning. "The nation's population centers are changing, and that's driving business location decisions, and consequently, our reinvestment decisions. Also, NS customers are making location decisions that directly impact the railroad."

Eisenach chairs the Tactical Lines Management Team (TLMT) with representation from Industrial Development/Pocahontas Land, Marketing, Engineering, Finance, Real Estate and Transportation. The TLMT is focusing on branch lines facing reinvestment. The team balances the cost and risk of reinvesting in lines of varying degrees of business opportunities.

"As an example," he said, "working with the Coal Department, we are taking care not to jeopardize future opportunities related to the Bush administration's declaration that the nation must increase its dependence on new coal-fired electric generating plants."

Strategic Planning identified parts of the NS system as core, strategic or tactical to help steer its reinvestment decisions.

"Our core routes are those lines connecting major gateways, markets and ports," Eisenach said. "They are absolutely essential for the survival of our franchise and are first in line for new capital. Most of our traffic moves along the core on its way to destination.

"Our strategic routes serve secondary ports and regions that were we to exit, we would concede those important regional markets to another rail carrier or to trucks. Our tactical lines are our carload gathering and distribution network. Their future is entirely dependent on the traffic originating and terminating on them.

"The reinvestment risk is highest on our tactical lines, because they generally are anchored by one or two customers or commodities," he said. "In today's dynamic economy, what is here today may not be here tomorrow. Our challenge is to target limited investment funds to anticipate changes in the market and make sure we don't strand assets. If we can't afford to invest in a particular line, it may make sense to convey it to a short line and keep the line haul business for NS. Moreover, short lines often qualify for public rehabilitation funding, which shifts the investment risk."

Eisenach said NS continues to look at all its assets to determine how best to use them.

"Like every other business, we have to look at how best to meet our customers' and shareholders' expectations," he said. "As we progress with sales, leases or other solutions, we'll continue creating the most efficient system for our customers."

NS 21 initiatives bring bottom line results

Norfolk Southern employees have been engaged in initiatives designed to make the company more efficient. The largest of these programs is NS 21, an ongoing study of business processes to improve customer service and lower costs. Its first wave included more than 40 recommendations now being implemented.

"We are already seeing significant results that go right to the bottom line," said Kathryn McQuade, senior vice president Financial Planning and co-chair of the NS 21 steering committee.

Car management efforts include a realigned Car Management department, standardized car metrics and a 10 percent fleet reduction. More than 9,000 surplus freight cars have been sold, yielding $33.3 million in proceeds. The goal is to dispose of 12,000 cars. NS also has turned back more than 1,000 surplus leased cars, significantly reducing expenses and bringing lower depreciation costs and less track congestion. Equipment rents have been reduced by $16 million over last year through a 7 to 8 percent increase in how quickly other railroads' cars move back to them.

Analysis of how the company interfaces with its customers focused on improving two processes: bill of lading to waybill, and car move reporting.

An Internet bill of lading was introduced recently so customers can generate a bill of lading electronically. Currently, 107 customers account for 2,500 internet bills of lading per week. NS receives 70 percent of its bills of lading electronically, and the teams will continue to increase the percentage. Electronic bills of lading are faster and more accurate and reduce the amount of rework.

The company stepped up its efforts to collect full payments from a targeted group of customers, translating into an estimated $800,000 in collections. Over the past year, NS has reduced the amount of time it takes to receive payment by four to five days, resulting in savings to NS of $500,000 - $600,000 per month.

To ensure more accurate and timely car move reports, NS launched additional training efforts for yardmasters and train crews. To date, 4,476 crews in 179 locations have received training, resulting in significant improvement in communication and documentation. Consequently, work order error rate for those trained has decreased from a baseline of 72 percent to just 7 percent.

The Purchasing team recommended a reduction in the vehicle fleet of 1,000 vehicles. To date, the fleet has been reduced by 500, with the additional 500 to be disposed of by year's end. This move will bring annual expense reductions of approximately $10 million. Vehicle expenses to date are running about $750,000 less than last year, and NS has received $740,000 for 278 sold vehicles. The company also is developing a new vehicle policy to ensure standardization and equal treatment across NS departments.

"One of the toughest jobs is that of the Facility Transactions team," said McQuade. "Closing or selling facilities is not a popular decision nor one to be considered lightly. We're exercising sound business judgment made on careful analysis, even when doing so requires difficult and unpopular decisions."

NS plans to sell or close a number of facilities. The company has announced plans to close the Coster Wheel, Birmingham Frog and Hollidaysburg Car Repair shops. The Roanoke foundry and Mechanical Reclamation area have been closed.

"At the end of the day, these efforts, along with other NS 21 initiatives, will strengthen our financial and operational positions," said McQuade. "As we move forward, we'll continue to identify and address ways to improve customer service and reduce costs. That is how we will realize our vision to be the safest, most customer-focused and successful transportation company in the world - the Thoroughbred of Transportation."

DARS celebrates its Silver Jubilee

Norfolk Southern's Drug and Alcohol Rehabilitation Services (DARS) program celebrated a milestone in June, its Silver Jubilee. NS employees and their families went to Roanoke, the location of the first jubilee, to celebrate recovery.

DARS provides a resource for all NS employees and their family members to identify and resolve chemical dependency problems so that they can work and live in a drug- and alcohol-free environment. The program is designed to help employees identify a drug or alcohol problem, resolve the problem through proper treatment and improve employees' ability to be productive.

Jubilees have been held for 25 of the 27 years the program has existed.

"The DARS Jubilee is an event to rejoice," said Jack Scott, manager DARS. "That's what this is about, celebrating our recoveries worked for day by day, and supporting one another in continued recovery."

Over 250 people attended, double the number of recent Jubilees.

DARS uses company counselors systemwide to assist employees and their families with addiction problems. Each counselor has railroad experience, personal experience in overcoming substance abuse problems and is available to help others.

"DARS has made a difference in many people's lives, and I encourage anyone who is seeking assistance to gain freedom from alcohol or drug abuse to call one of our counselors," Scott said.

DARS Counselors

New Ohio intermodal facility;
new service to Savannah; Austell opens

Norfolk Southern opened its new intermodal terminal in Maple Heights, Ohio, near Cleveland. NS invested $11 million to construct the 70-acre facility.

The terminal provides local businesses with an efficient and cost-effective option for transporting goods via rail and will help stimulate local economic development. It is convenient to Interstates 480 and 271, providing quick access for truck interchanges. The terminal was built in an existing rail yard in Maple Heights.

The company also now provides exclusive rail service to the new Mason Intermodal Container Transfer Facility, located at and operated by the Port of Savannah, Ga.

The Savannah facility offers a number of benefits for NS customers. These include direct rail service to the port, efficient transfer of containers between rail and ship, improved performance in key lanes and new East-West services to be launched later this summer.

NS also opened its new southeastern intermodal hub in Austell, Ga., on July 30. Austell, in conjunction with the company's Inman facility at Atlanta, provides NS with the ability to serve the Southeast with new hub capabilities that will improve service across its entire system. Once this facility is complete, it will offer 3,000 parking spots and 20,000 feet of unloading track.

BRS, IBEW support START policy

The Brotherhood of Railway Signalmen (BRS) and The International Brotherhood of Electrical Workers (IBEW) have agreed to support START, Norfolk Southern's policy to address discipline and rules violations in a positive, educational manner, for employees they represent in the Communications and Signals department.

The policy, called System Teamwork and Responsibility Training (START) uses alternative training and education rather than formal hearings for minor and some serious offenses. It involves local chairmen in determining the appropriate handling of discipline involving rules violations and creation of joint labor-management oversight committees to ensure consistent application of the policy.

START was adopted in January 2000 by train and engine service employees represented by the Brotherhood of Locomotive Engineers and the United Transportation Union. The policy became effective July 1, 2001 for employees in the Communications and Signals department represented by BRS and IBEW.

"Over the past year and a half, START has fostered trust and cooperation, improved discipline procedures and helped us continue to develop a stronger relationship with each other," said Mark MacMahon, vice president Labor Relations. "We look forward to working with employees represented by the BRS and IBEW to focus on positive ways to improve performance and resolve issues together."

"We believe START is an important first step," said Floyd Mason, vice president BRS. "It is an opportunity to improve the handling of discipline for our members and to begin a cooperative effort involving our union representatives and the company's management."

The BRS represents approximately 1,200 Norfolk Southern employees who maintain the railroad's signal systems. The IBEW represents approximately 230 Norfolk Southern employees who maintain the railroad's communications systems.

NS employees eligible for vehicle discounts

Ford, General Motors, Isuzu, Nissan and Subaru are offering vehicle purchase and lease discounts to Norfolk Southern employees. Some exceptions apply, and dealer participation is voluntary.

For more information, contact the manufacturers as follows:

Ford:
Ford Supplier Partner Recognition vehicle purchase program (Ford, Land Rover, Lincoln, Mazda, Mercury and Volvo) - Employees, retirees and spouses are eligible.
www.ford.com
For application: www.fordpartner.com , partner code B9ZYK or call 877-XPLAN-00

GM:
GM Supplier Discount (GM, GMC and Saab) available through Sept. 30, 2001 - Employees only
www.GM.com
For application: www.GMsupplierdiscount.com or call 800-960-3375

Isuzu:
VIP Purchase and Lease Program (new only) - Employees only
www.isuzu.com, e-mail vip@americanisuzu.com or call 800-995-7372

Nissan:
Vehicle Purchase Program (new only) - Employees only
www.insidenissan.com or call 800-299-4753

Subaru:
VIP Program - Employees only
www.subaru.com or call 800-VIP-0933