The Future Is Now

[Michael Knight]

Where Do You See NS in Ten Years?

October 1, 2007


           This is a good question to ask ourselves. Having successfully absorbed Conrail's former lines, Norfolk Southern (NS) is now focusing its attention on the original, post 1982 system. The three projects currently underway are: the Meridian speedway, Crescent route, and the tunnel clearance project on the Pocahontas Division. With the these projects NS is undertaking, the NS system will be poised to handle the astronomical increase in demand that is predicted for rail transportation. But what railroad will be operating that system when the benefits of today's enhancements are fully appreciated?

          Whenever the next round of mergers in the railroad industry occurs, NS will no doubt find itself making news. The Surface Transportation Board's (S.T.B.) moratorium on mergers and subsequent  regulations were designed to make the inevitable "big one" (merger) more difficult and less desirable. Thus, class one railroads were encouraged to cooperate between themselves with seamless connections and better planned interchange agreements. Thus far, the railroads have had nothing but success doing this; the "big four" (Union Pacific, BNSF, CSXT, and Norfolk Southern) have proved they can function efficiently without a merger. Interestingly, the S.TB.'s strict merger requirements did not include Kansas City Southern- K.C.S. was viewed as more of a regional carrier, and not necessarily a threat to force the "big four" to become the "big two."

         In recent years, NS and K.C.S. have become better partners. Through a cooperative agreement and joint venture, the Meridian speedway project that NS and K.C.S. have begun offers many benefits for both companies. In this project, one can see these two rail carriers investing heavily and cooperating to improve service. Thus, the railroads are investing in a quality product (physical plant) to allow them to reap profits through quality service- exactly what deregulation was created for. Michael Haverty, K.C.S.'s President who orchestrated the alliance with Mexican carrier T.F.M., has put K.C.S. in a valuable position for the future. Whenever the next big merger occurs, K.C.S. might be the center of attention.  Although the question remains; where will NS be?