Norfolk Southern Corporation (NYSE: NSC) is consolidating its Virginia and Pocahontas divisions to form the new Pocahontas Division, with headquarters in Roanoke, Va., effective Feb. 1.
The consolidation is part of the company’s ongoing drive to enhance operating efficiencies and support long-term growth. This announcement follows other recent strategic initiatives, including the reduction from three corporate office locations to two, restructuring of the Triple Crown Services subsidiary, and integration of the D&H South Line to increase options for shippers.
In a related move, Norfolk Southern is changing traffic patterns and idling parts of its “West Virginia Secondary,” a 253-mile line between Columbus, Ohio, and central West Virginia that has experienced steady declines in business in recent years. This follows the idling of a 33-mile mainline between Elmore and Princeton, W.Va., in September 2015.
The new Pocahontas Division will comprise 2,581 route miles, mainly in Virginia and West Virginia, extending from the Port of Virginia to Portsmouth, Ohio, and from Bristol, Va., to Hagerstown, Md. “Creation of the new Pocahontas Division supports the railroad’s strategic plan to deliver cost-efficient and superior service while building a stronger enterprise,” said Mike Wheeler, senior vice president operations. “Consolidating the two divisions enables us to streamline operations and focus resources on high-return growth opportunities.”
Combining the divisions will improve service by placing most of the company’s coal routes under the operating authority of a single division. Additionally, the move further consolidates operational control over the company’s Heartland Corridor, a double-stack intermodal route through Virginia, West Virginia, and Ohio.
Roanoke, which will serve as headquarters of the new Pocahontas Division, currently is headquarters of the Virginia Division. The new division will be led by Superintendent Charles M. “Mike” Irvin, a 33-year employee with wide experience managing several different divisions for the railroad. In Roanoke, Norfolk Southern currently operates a local switching yard, locomotive and rail car maintenance and overhaul facilities, and a material yard that supports track maintenance gangs systemwide.
The consolidation will affect management and office staff positions now based in Bluefield, W.Va., currently the Pocahontas Division headquarters. Those employees will have an opportunity to relocate to Roanoke or apply for other positions at the company. With the consolidation, Norfolk Southern will operate 10 divisions across its network.
The company will continue to operate its rail yard in Bluefield. Trains moving Appalachian coal comprise most of the business handled there, and yard traffic has declined as coal volumes moved by the railroad have dropped over the past five years. Currently, about 130 people work in operations departments at the yard, including in transportation, engineering, and mechanical.
“Coal mined from the Appalachian Basin has long served as a vital, low-cost source of energy to power America, and Norfolk Southern remains committed to providing top-notch service to our valuable coal customers,” Wheeler said. “At the same time, the railroad is nimble and adapts to changing market conditions. Our strategic plan positions us to meet the needs of current customers while creating efficiencies and focusing resources on infrastructure and markets that support continued growth.”
For example, Wheeler noted that the Heartland Corridor, opened in 2010 as part of a public-private partnership among Norfolk Southern, Virginia, West Virginia, Ohio, and the federal government, created the shortest, most efficient, and environmentally friendly route to transport intermodal freight between the Port of Virginia and Midwest consumer markets. This year, Norfolk Southern trains will begin serving the new Heartland Intermodal Gateway in Prichard, W.Va., the state’s first intermodal facility, which was developed through the corridor partnership.
“The Heartland Corridor opens global trade markets for West Virginia, Kentucky, and Ohio businesses, creates opportunities for jobs and economic expansion, and supports the railroad’s efforts to shift freight from highway to rail,” Wheeler said. “The Heartland Corridor is a vital part of the U.S. transportation network. As we help communities and businesses compete in the global marketplace, we are building a stronger future for Norfolk Southern and our shareholders.”
In Virginia and West Virginia, Norfolk Southern in 2014 employed 5,690 people and funded a payroll of $450 million, invested $235 million in track and facilities, and spent $278 million in purchases and payments with suppliers and local businesses.
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation’s premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 20,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal, automotive, and industrial products.
Dave Pidgeon, 717-433-2934 (firstname.lastname@example.org)
Katie Cook, 757-629-2861 (InvestorRelations@nscorp.com)