Oberman, in a letter Tuesday to NS President and CEO Jim Squires, called for NS (NYSE: NSC) to provide a review of the state of the network, including an assessment of why its service metrics aren’t near 2019 levels. Oberman also wants to know whether drops in NS’ headcount levels affected NS’ service metrics.
“Coinciding with the marked deterioration in NSR’s [Norfolk Southern Railway] performance metrics, the board has received an increasing number of complaints from NSR’s customers about poor performance. These complaints include missed switches, cars stranded at intermediate yards, longer transit times, operating plan changes without notice, and a lack of communication from customer service,” Oberman wrote.
“Many of these complaints are from customers along NSR’s Cincinnati to Chattanooga corridor, but I have also heard from shippers in the deep South and the mid-Atlantic. Taken together, they represent a cross-section of key commodity groups. These rail service disruptions have caused customers to incur additional costs, typically without compensation from NSR,” he continued.
In response to Oberman’s letter, NS told FreightWaves, “We are in regular communication with Chairman Oberman and the STB, and look forward to responding to his letter. Restoring our service levels is our highest priority, and we are working around the clock to communicate with our customers to provide as much visibility into operations as possible while we work to accomplish this.”
Oberman’s letter comes as STB is taking an active approach to shipper issues, with the board tackling issues such as reciprocal switching.
Oberman’s letter to NS is similar to one he sent to CSX (NASDAQ: CSX) in October. CSX subsequently responded to that letter in early November, with CSX President and CEO Jim Foote acknowledging that service metrics weren’t where he would like them to be but that the railroad has undertaken more aggressive hiring practices and sought to improve network fluidity.
Oberman noted that the average train speed for manifest service was 14 mph for the second reporting week of November 2021, in contrast to a reported speed of 20.7 mph in November 2019. Average terminal dwell for that same week in November 2021 was 27.5 hours compared with 17.8 hours in 2019. Meanwhile, the number of transportation employees has fallen over the last three months.
“For these reasons, I am requesting that you provide the board with a review of the current state of NSR’s network, and your assessment of what factors are affecting NSR’s ability to achieve past levels of fluidity and consistent service, and in particular the impact on customer service of previous headcount reductions for train, yard, and maintenance employees,” Oberman wrote.
Oberman wrote that it would be helpful for NS to provide an update on its hiring plans as described in a June 18 letter to the board.
“In light of the declining employee headcount since June as shown by the data supplied to the STB, your program does not appear to have succeeded in obtaining a workforce level sufficient to avoid the service challenges described above. Please detail any adjustments NSR has made in the intervening time, and any modifications or additional efforts NSR intends to make in the future to increase its overall operating headcount against attrition,” Oberman wrote.
“I take the problems involving NSR’s service with the utmost seriousness and look forward to their resolution in the shortest possible time as the Nation’s economy continues its rebuilding efforts while recovering from the effects of the pandemic,” he continued.