Norfolk Southern hopes new plan will attract more business-away from trucks

by Canadian Shipper

Norfolk Southern Corp. says its new operating plan (the ‘Thoroughbred Operating Plan’) which seeks to boost the railroad’s on-time performance and reliability rates, will enable it to gain business from the trucking sector, its biggest rival.

Norfolk Southern says it has reduced transit times between 10 percent and 30 percent for most of the 250 routes and schedules it reconfigured, and hopes to persuade more customers to switch their shipments from trucks to tracks.

The new program is an attempt to fix customer service problems that spiked after the company took over half the Conrail system in mid-1999, reports Knight Ridder/Tribune Business News. After Norfolk Southern and CSX Corp. agreed to split Conrail, they struggled to integrate the additional traffic and complex network into their systems. As a result many shippers were left frustrated by slow and inconsistent service.

The Conrail merger also created a new opportunity for the railroad to compete against trucking.

The trucking industry accounts for about 80 percent of total freight traffic in the U.S. Norfolk Southern says that east of the Mississippi River, trucks handle as much as 87 percent of shipments moving between cities. Conrail had tracks running through much of the urban territory between the upper Midwest and Northeast, and this gave Norfolk Southern access to the nation’s most-concentrated market for inter-city shipping after the merger.

Though some of the railway’s new business can be attributed to the new operating plan, many shippers are waiting to see how reliable the railway’s move to a more integrated network will become.

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