NS says intermodal service improving, but trade speeds don’t reflect

[NS Newsfeed]

Norfolk Southern Railway says infrastructure improvements and added locomotives are improving network velocity, but the railroad's intermodal train speeds, an indicator of network reliability, tell a different story.



As of July 31, average intermodal train speeds for the Virginia-based railroad were nearly unchanged from historic averages this time last year and were significantly below the historic average this time two years ago.



The railroad has acknowledged that its efforts to restore network speeds have been "uneven."



However "service has improved," the railroad said in a statement late last week. "We now have the resources largely in place to continue the service gains and will remain focused on progressing towards the service levels realized in 2012 and 2013."



In its recent second-quarter earnings conference call, NS executives trumpeted quarter-over-quarter improvements seen in the first half of 2015. According to the railroad's metrics, speeds were up roughly a third of a mile between the first and second quarter and executives noted that the railway's internal service composite performance increased from the mid-70s to 79 percent.



And things bode well for the third quarter, as well, they said.



"Clearly we're trending in the right direction," Mark Mansion, executive vice president and chief operating officer, said on last month's call.



But according to the most recent train speeds, "the overall trend is not favorable," countered Larry Gross, senior transportation analyst at FTR Associates.



According to Gross and NS's own self-reported figures, intermodal train speeds averaged 26.3 miles per hour the week ending July 31, placing the four-week average for period ending that week at 26.75 miles per hour.



That's worse than the four-week average during the same period last year, 26.8 miles per hour, and worse still than the railroad's speeds two year ago.



"To put this into context, two years ago this week, the four-week moving average intermodal train speed stood at 28.9 miles per hour," Gross said.



That's not to say NS train speeds are at their worst, he added.



"Speeds are definitely higher than during the trough which occurred in late November of last year, when the equivalent figure to the above got down to 23.3 miles per hour," Gross recounted.



NS representatives declined to comment and merely pointed to a transcript from the railway's second-quarter earnings call and a service update posted online.



According to that update, the railroad has produced measurable improvements to its network performance with increased average train speeds and reduced dwell times. However, the update specifically cites the NS merchandise network, not intermodal.



The service update lists a number of developments that should boost train speeds in the second half of 2015 including the upcoming acquisition of a portion of Delaware & Hudson Railroad Co. track, which will provide shippers in Pennsylvania, New York and New England with improved service; the integration of the newly expanded Moorman Yard in Bellevue, Ohio; expanded capacity along the Streator Line south of Chicago including the expansion of the Kankakee Yard and extended signings at Riddick and Schneider, Indiana; and an expansion of its Rutherford Intermodal Terminal.



The railroad, though, also noted seven track maintenance projects this month alone and seven more in September that are expected to cause delays up to four hours each.