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The CEO of Norfolk Southern, James A. Squires, recently asked employees for feedback concerning the carrier’s responsiveness to the COVID-19 pandemic. SMART Transportation Division has been gathering reports about how carriers are complying during the outbreak of coronavirus. As one of those employees deemed “essential,” SMART-TD Vice General Chairperson Robert M. Levkulich (GCA-898) sent the following email to NS’s top boss to express his opinion, which is reproduced here with Brother Levkulich’s permission:
Mr. Squires, as the outside world continues to spiral out of control, it feels as if it’s just another day along the railroad. As Transportation employees, we read daily updates that Norfolk Southern has taken to protect its office workers, in Atlanta and Norfolk, but in yard offices around the system, it’s business as usual.
For conductors and engineers operating across Norfolk Southern, we have been categorized as an essential part of our nation’s infrastructure, and essential in the fight against Covid-19. Since conductors and engineers are deemed essential, then so should our safety and well-being.
Norfolk Southern used to prioritize the safety of its employees, but recently the only priority has been to get to a 60 OR. I have visited numerous yard offices, and I’ve seen a lot of things that impressed me. But these were from individuals. I saw a conductor who brought masks his wife and kids had sewn in for his fellow crew members. I saw an engineer carrying in bottles of home made hand sanitizer to distribute in the yard office. And finally I saw a Road Manager that was carrying in an arm full of sanitizer that he used his own money to pay for. These individuals taking care of each other are inspiring stories but are void of Norfolk Southern.
Companies across this nation are stepping up to show their employees they care. As Transportation employees we have seen drastic financial loss due to the “chase for a 60 OR” and now with COVID-19 and closures, we have taken another hit.
Ally Financial took unprecedented steps to show its 8700 employees they care. Below are excerpts from Forbes Magazine article dates 4/6/20:

  • All employees making $100,000 or less in annual base compensation will receive a $1,200 tax-free financial assistance payment to help cover unexpected costs related to working from home.
  • Ally added 100% coverage for diagnostic testing and the associated visit related to COVID-19.
  • Immediate paid medical leave for any employee diagnosed with COVID-19.
  • Expanded childcare support: When daycare or adult/elder care arrangements are disrupted, Ally will cover 30 uses of emergency care.
  • Employees with monthly or quarterly incentive plans were assured that Ally would account for COVID-19 impacts to operations.
  • Access to free mental health professionals, via phone or text, through the Employee Assistance Program.
  • 100% coverage for virtual doctor visits and online health care services.
  • Paid caregiver leave for employees caring for an ill family member.
  • Well-being modules and challenges geared to staying physically and mentally healthy at home

These are great examples of what a company can do do to protect its employees.
So Mr. Squires my question is, What will Norfolk Southern do for its most valuable, and essential employees?

Robert M. Levkulich
Vice General Chairman
Southern Lines GCA-898
SMART Transportation Division

NORTH OLMSTED, Ohio — The team negotiating the next National Rail Contract which will affect more than 40,000 SMART Transportation Division members has been finalized by the union’s leadership.
The team will be led by TD President Jeremy Ferguson with the assistance of Vice Presidents Brent Leonard; John J. Whitaker III; Chadrick Adams; Jamie C. Modesitt; Joe M. Lopez and David B. Wier Jr.
Also part of the team are five General Chairpersons, Mike LaPresta (BNSF); Gary Crest (Union Pacific); Roger Crawford (Illinois Central); Thomas Gholson (Norfolk Southern) and Christopher Bartz (yardmasters).
“We are prepared to do whatever it takes to get the most out of this round of national contract talks,” President Ferguson said. “It will be a challenging process and it could be quite contentious at times. However, we on the negotiating team are confident that as we work through the process we can achieve a positive result.”
The opening meeting of negotiations is scheduled for February 26 and 27 in Washington, D.C., with talks occurring in Cleveland, Omaha, Washington, D.C. and Chicago, as the year progresses.
SMART-TD is part of a Coordinated Bargaining Coalition that consists of it and nine other unions representing rail labor. Carriers BNSF, CSX, Kansas City Southern, Canadian National, Norfolk Southern, Soo Line, Union Pacific and numerous smaller railroads are represented by the National Carriers’ Conference Committee (NCCC) during negotiations.
In related news, CSXT will not be part of national bargaining, except for health and welfare issues. For the wages and rules portion, SMART-TD and CSX have agreed to begin bargaining locally on behalf of trainmen starting Jan. 21, 2020.
A joint meeting for the negotiating parties regarding facilitated bargaining is scheduled in Jacksonville, Fla., on January 22 and 23.
Additional meeting dates for these negotiations are currently under discussion, and a tentative schedule will be set in the near future. Neither the SMART-TD nor CSX have exchanged any proposals, and an agenda for the subjects to be discussed during these contract talks, which are separate from the National Rail Contract negotiations, has yet to be finalized.

The Pipeline and Hazardous Materials Safety Administration (PHMSA) has granted Energy Transport Solutions LLC of Doral, Fla., a special permit that allows for the transport of liquid natural gas (LNG) on a route from Wyalusing, Pa., to Gibbstown, N.J.
U.S. Rep. Peter DeFazio of Oregon and U.S. Rep. Tom Malinowski of New Jersey, both members of the House Committee on Transportation and Infrastructure, responded with disappointment to the PHMSA announcement Dec. 6.
“News of PHMSA’s decision to jump ahead of its notice of proposed rulemaking on moving LNG by rail and grant a special permit to Energy Transport Solutions, LLC to move LNG by rail tank car is deeply disturbing,” DeFazio said. “This reckless move by the Administration puts communities in harm’s way. For months I have been sounding the alarm on this dangerous plan. Not only has PHMSA failed to take the proper steps of testing, analyzing or reviewing this unprecedented plan, it failed to provide Congress and the public the opportunity to consider whether the permit’s operating conditions sufficiently address the potential safety implications — an opportunity that’s required by law. The agency rushed its job, spending a measly six months considering this petition and the nearly 3,000 public comments it received.
“In June, Congress passed my amendment to prohibit DOT from finalizing the LNG by rail rule that President Trump intends to rush through in 13 months. I urge the Senate to work with us to put a stop to these irresponsible actions.”
Malinowski said the agency has ignored safety concerns expressed by multiple groups.
“The movement of LNG by rail tank car presents unique and substantial risks to public safety and the environment. This decision by the Department of Transportation to allow LNG to move in large volumes without adequate safeguards is irresponsible, and yet another example of the Administration putting corporate interests over the safety of the American public,” he said.
The north-to-south route is about 175 miles. It runs from fracking shale wells in northern Pennsylvania to a port in New Jersey and likely will be served by Norfolk Southern, the Philadelphia Inquirer reported. The permit expires in November 2021 and allows for no intermediate stops on the route when the LNG is being transported.
Read an article about the permit from the Philadelphia Inquirer.
Read the special permit issued by PHMSA.

A jury found Norfolk Southern liable last month for a 2010 breach in contract with Drummond Coal Co., meaning that the carrier could end up paying back the Alabama-based coal company millions in penalties.
The contract between the coal supplier and NS required that Drummond’s operations use the carrier to move a minimum amount of coal from a terminal in Charleston, S.C., to a number of power plants in the southeastern United States. When those levels were not met due in part to the closure of 13 plants because of federal Environmental Protection Agency regulations, NS collected penalties from Drummond to the tune of $35 million with another $40 million yet to be paid, Al.com reported.
After Drummond filed a suit against NS in 2016, the jury found in favor of Drummond, which has requested a refund of the $35 million in penalties levied against it, plus interest.
NS has asked for a new trial in the case.
Read a full article about the decision from Al.com.

The Surface Transportation Board (STB) chairwoman has asked Norfolk Southern’s CEO to keep the board apprised as the carrier begins to add elements of Precision Scheduled Railroading (PSR) to its operations, Trains Magazine reports.
The letter from Ann Begeman, sent Nov. 27 to NS CEO Jim Squires, requests that the carrier begin weekly conference calls with the STB to report operational changes, the magazine reported in an article posted Nov. 29.
The requirement of updates from NS mirrors the approach STB has taken in handling another Class I that is trying out PSR.
Union Pacific (UP) announced in early autumn that it also had begun adopting aspects of PSR as part of its “Unified Plan 2020” initiative. PSR is a strategy by the late CSX CEO E. Hunter Harrison that he implemented at both Canadian National and Canadian Pacific and requires cargo to be ready when rail cars arrive for loading or risk being left behind, among other aspects. Both Canadian carriers reported financial benefits after these implementations.
When Harrison moved to CSX in early 2017 and began adding PSR to that carrier’s operations, CSX received substantial criticism from shippers amid reports of service problems as the year progressed. This drew the attention of STB and resulted in a hearing before the STB to address the carrier’s difficulties.
To avoid a repeat of those problems encountered by CSX, a letter from the STB sent in September to UP sought weekly updates on the implementation.

By a margin of nearly four to one, SMART Transportation Division members have voted to APPROVE the new National Rail Contract. The voting was conducted by BallotPoint Election Services, who certified the following results for each craft eligible to vote:

CRAFTACCEPTREJECT
Conductors79.89%20.11%
Brakemen78.98%21.02%
Engine Service76.58%23.42%
Yardmen79.97%20.03%
Yardmaster86.68%13.32%
Combined79.57%20.43%

The approved contract will have an effective date of December 1, 2017, with implementation of new pay rates and employee healthcare cost-sharing modifications planned for January 1, 2018. Employees’ monthly healthcare contributions will remain frozen at $228.89 for the life of the contract.
The term of the agreement is for five years, from January 1, 2015 to December 31, 2019. In addition to a 3% increase previously negotiated and already implemented on January 1, 2015, the contract provides for full retroactive pay of 2% from July 1, 2016 through June 30, 2017, and 4% from July 1, 2017, until implementation of the new rates. Thereafter, affected members will receive a boost in wage rates of 2.5% on July 1, 2018, and 3% on July 1, 2019.
The ratified contract will cover over 35,000 SMART TD members employed by BNSF, CSX, Norfolk Southern, Kansas City Southern, Union Pacific and numerous smaller carriers, all of whom were represented in this round of bargaining by the rail industry’s National Carriers’ Conference Committee.
The SMART TD negotiating team was led by President John Previsich, who was assisted in the negotiations by Vice Presidents David Wier, John Lesniewski, Troy Johnson, John England, Doyle Turner and Jeremy Ferguson, along with General Chairpersons Danny Young (BNSF), Mark Cook (NS), Brent Leonard (UP) and Steve Mavity (CSX), all four of whom are nationally elected TD officers in addition to serving as General Chairpersons.
For this round of bargaining, SMART TD joined forces with five other unions to form the Coordinated Bargaining Group. The other unions in the CBG are the American Train Dispatchers Association; the Brotherhood of Locomotive Engineers and Trainmen (a Division of the Rail Conference of the International Brotherhood of Teamsters); the Brotherhood of Railroad Signalmen; the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers and the National Conference of Firemen and Oilers/SEIU.
President Previsich commented: “I believe that our negotiating team, along with the teams from the other unions in the CBG, are to be commended for staying the course during a long and tedious round of negotiations. The easy thing for them to do when the going got tough was to declare defeat and walk away from the negotiating table, as others have done, but our team never wavered. By rejecting the carriers’ unreasonable demands while staying at the table and continuing to negotiate, the team was successful in obtaining an agreement that achieved an approval rate of 79.57%.”

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The SMART Transportation Division, formerly the United Transportation Union, is the largest rail union in the United States representing members in all operating crafts, including engineers, conductors, trainmen, switchmen and yardmasters.

Follow this link to view this release in PDF form.

The Pittsburgh Post-Gazette reported that with the help of a $20 million dollar state grant, Norfolk Southern (NS) will develop a second freight route through Pittsburgh, Pennsylvania, that has the capability of supporting double-stack freight cars. The project has been in the works since last June, when a landslide from Mount Washington closed NS’s double-stack line for nearly two weeks. The second, alternative line will now exist as a backup line. A portion of the funds will be utilized for railroad bridge repair in the area.
Click here to read more.

CSX_logo
Net Earnings: $455 million or $0.48 per share; down from $507 million or $0.52 per share
Revenue: Declined 8 percent
Operating Income: Declined 10 percent to $841 million
Operating Ratio: Increased 70 basis points to 69.0 percent
Click here to read CSX’s full earnings report
 
KCS_rail_logo
Net Earnings: $121 million or $1.12 per diluted share; down from $132 million or $1.20 per diluted share
Revenue: Decreased 4 percent to $605 million
Operating Income: Decreased 9 percent to $200 million
Operating Ratio: Increased to 66.9 percent
Click here to read Kansas City Southern’s full earnings report
 
CP_Logo_RGB
Net Earnings: C$347 million (7 percent increase) or C$2.34 diluted earnings per share (a 15 percent increase); up from C$323 million or C$2.04 diluted earnings per share
Revenue: Decrease of 9 percent to C$1.55 billion
Operating Income: C$657 million, a decrease of 13 percent
Operating Ratio: 57.7 percent, lowest ever reported
Click here to read Canadian Pacific’s full earnings report
 
union_pacific_logo
Net Earnings: $1.1 billion or $1.36 per diluted share (9 percent decline); down from $1.3 billion or $1.50 per diluted share
Revenue: $5.2 billion, down 7 percent
Operating Income: Declined 11 percent to $2.0 billion
Operating Ratio: 62.1 percent, up 1.8 points
Click here to read Union Pacific’s full earnings report
 
CN_red_logo
Net Earnings: C$972 million or C$1.25 per diluted share, as compared to 2015 3rd quarter of C$1,007 million or C$1.26 per diluted share
Revenue: Decreased 6 percent to C$3,014 million
Operating Income: Declined 5 percent to C$1,407 million
Operating Ratio: A record 53.3 percent, a 0.5-point improvement
Click here to read Canadian National’s full earnings report
 
ns_Logo
Net Earnings: $460 million (2 percent increase) or $1.55 diluted earnings per share (4 percent increase); up from $452 million or $1.49 diluted earnings per share
Revenue: Declined 7 percent to $2.5 billion
Operating Income: Stayed at a steady $820 million
Operating Ratio: 67.5 percent, a 220 basis point improvement over 2015’s reported 69.7 percent in the third quarter
Click here to read Norfolk Southern’s full earnings report
 
Note: Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.

ns_LogoRailway Age reported that Norfolk Southern Corp. (NS) will downsize its Knoxville, Tenn. yard effective May 1. Approximately 135 positions will be eliminated. According to NS, this action is in response to lower traffic volumes. Read the entire story here.