Strategy needed on NS plans
No information has been forthcoming about whether Norfolk Southern’s adoption of what’s being called “precision-scheduled railroading,” or PSR, will impact this railroad city in a negative way.
For now, that silence is good news.
However, Altoona would prefer an announcement that there will be no detrimental impact — or, better yet, an assurance that Altoona will be gaining in some way once PSR is implemented fully — nor hurt.
However, recent days have brought a report from elsewhere that justifies attention and some concern.
That report should be recognized as a need for a local strategy, should Altoona eventually receive bad news on Norfolk Southern’s PSR-related front.
While time hopefully will prove all of that to have been an overreaction locally, it’s obvious that being prepared is much better than having no strategies for reaction and response in place.
The intent at the foundation of PSR is to use fewer trains and hold them to tighter schedules, in order to boost profits and, thus, stock prices — not really a bad thing, from a freight-business standpoint.
According to the Wall Street Journal, Norfolk believes that the plan it is attempting to implement will allow it to save much money by eliminating approximately 3,000 employees from its current workforce of about 26,000 and shed 500 locomotives from its 4,100-unit fleet.
But the attainable company benefits might be dwarfed by the damage otherwise wreaked on the employees and communities affected.
Norfolk Southern is neither the first nor the only railroad to “get aboard” the PSR concept, and more railroads are likely to opt in, going forward. But what’s happening within the operations of the Union Pacific Railroad demonstrates the scope of damage some places might incur related to PSR decision-making.
The crippling congestion Jacksonville, Fla.-based CSX Corp. caused east of the Mississippi River after it put PSR in operation was temporary; what Union Pacific is doing in Texas, related to PSR, could cause permanent damage to that state.
On behalf of the fewer, longer trains called for under its PSR model, Union Pacific has halted construction of a $550 million facility — what’s referred to as a “hump yard” — in Brazos, Texas, and closed train-sorting operations in Pine Bluffs, Ark., and Hinkle, Ore.
According to an April 19 article in the Wall Street Journal, the Brazos facility was the single-largest capital project in the 156-year-old railroad’s history.
It doesn’t take an economic guru to imagine how that $550 million loss will affect people and businesses — the economy — in Texas and nearby states. Most people can imagine the lost wages tied to construction jobs, and the effect on employees who would have been needed to maintain the yard’s operations.
Union Pacific says the new PSR plan it is installing is freeing up capacity to sort trains at other locations, reducing the immediate need for the Brazos yard.
But what an economic blow to Brazos.
Norfolk Southern is eyeing reduction in its operating ratio — the percentage of revenue consumed by operating costs — to 60 percent by 2021, from 65.4 percent in 2018.
Hopefully, a component toward achieving that goal won’t include troubling changes affecting Altoona area rail operations.
Norfolk hasn’t revealed any thinking underway currently in its corporate offices; it might be too early for firm decisions.
However, Altoona must have response options available, in case a damaging proposal emerges.