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New NS president admits problems, promises solutions

By David Lassen | January 12, 2022

Shaw, railroad's CEO-to-be, outlines efforts to address labor issues

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Man speaking at conference
Man speaking at conference
New Norfolk Southern president Alan Shaw speaks to Wednesday’s joint luncheon of the Midwest Association of Rail Shippers and Traffic Club of Chicago. (Trains: David Lassen)

LOMBARD, Ill. — Alan Shaw introduced himself to the Midwest Association of Rail Shippers with a statement he clearly would have preferred to avoid.

“We don’t have a good product right now,” Shaw said.

“That’s unacceptable to me, that’s unacceptable for our employees, and it’s unacceptable to our customers,” continued the new president of Norfolk Southern, addressing Wednesday’s joint luncheon of MARS members and the Traffic Club of Chicago. “We’re all dealing with the labor shortages and COVID … But you know what? We’re not a victim, and frankly, our customers don’t care. Our customers want us to provide solutions.”

And so Shaw, who will become the company’s CEO in May, began outlining how NS would address the service problems that have drawn the attention of the Surface Transportation Board. On the manpower front, they include:

— Increased hiring. December’s conductor training class was the largest of 2021, he said, and the January class will be four to five times larger.

— Bonuses. The railroad is offering hiring bonuses, retention bonuses, referral bonuses, and availability bonuses, he said, and buying back vacation time to increase crew availability.

“I myself have actually referred someone to our conductor training program,” he said, joking, “Now, I didn’t ask for the bonus. I didn’t think that was right. But we’re all doing our part.”

— Supervisor efforts. Some supervisors have made short-term moves to the railroad’s training facility to help educate those new hires. Others have helped address the shortage of crew taxies by driving crews; still others have returned to their original crafts to move trains. “That shows you the dedication they’ve got to get this fixed,” he said.

To address supply-chain constraints, NS is collaborating with the Georgia Ports Authority to create a “pop-up” container site to open up space at the Port of Savannah and move cargo closer to its ultimate destination [see “’Pop-up’ inland port in Atlanta …,” Trains News Wire, Dec. 27, 2021]; is working with Alabama on a $231 million rail infrastructure project [see “Alabama launches new rail projects,” News Wire, Jan. 6, 2022];

“We’re going to get it fixed,” Shaw said. “I guarantee we’re going to get it fixed. That’s the foundation of everything we do.”

He is not quite ready to offer a timeline, however.

“I’m not in position to tell you when we’ll get all the pieces in place,” he says. “But we will, fairly soon, be in a position to tell you that. And then we’ll have very candid and very direct conversations with our customers. Because you need to know that.”

Shaw also contends the issues NS has experienced are not related to its implementation of Precision Scheduled Railroading.

“We could be accused of not recognizing the increased attrition soon enough last year,” Shaw says. “But PSR is actually designed to improve the efficiency of your crew base. And if that’s your limiting factor, then PSR is the right thing to do.”

In recognizing that the workforce and lifestyle changes from the Great Resignation have had a huge impact (“Our jobs are hard … I get it,” he says), he says NS must “do a better job of demonstrating the value of working in the rail industry. … Nobody who’s retired from the railroad says, man, that was a bad thing. We’ve got a really good benefits package. It’s maybe kind of back-loaded to the end of your career, and maybe people don’t use that in their calculus as they’re making choices on jobs.

“We have to do a better job of showing the value of working for rail. And we all have to do a better job of showing appreciation for our employees, and showing the value they bring to NS.”

10 thoughts on “New NS president admits problems, promises solutions

  1. A lightbulb went on in somebody’s head. They say they get it and changes will be made. Hallelujah.
    Have we heard this before? Yes. Do we believe it? Time will tell. Hope springs eternal.

  2. He talks the talk; now let’s see if he walks the walk. He has a mountain of problems to contend with, many of them self-inflicted.

  3. Want to positively recognize the workforce? Then stop furloughing them at the slightest business downturn, along with your PSR disaster.

  4. One of the first steps of AA is to admit you have a problem. Does he have problems? Definitely. A raft of them. Like an alcoholic, those problems are self-inflicted. Let’s see if he can make it to Step 12 before the judge prescribes Disulfiram. He will not like the effects of Disulfiram.

  5. PSR is certainly the problem. Furlough a significant amount of your workforce. That’s across the board. T&E, engine maintainers, c&s and mow. Mothball and sell off locomotives. They cannibalized the mothballed locomotives so they were unable to return to service. This is all in the name of PSR. Furloughed employees aren’t coming back. Employees with 15 or more years are leaving for better pastures as their seniority went down the tubes. No amount of incentives will keep the new employees when they are treated poorly and they encounter first-hand the railroad lifestyle. Denying earned vacation and personal days because they are short employees, which is the railroads own doing. Until the railroad owns up to their responsibility for this mess, it will continue.

  6. Shows how clueless he is.
    You can have 50k trainees show up every month & ain’t no1 ever gonna stay working for the RR long. Who wants to work on call 24/7/365 after 15+ yrs? After 20 yrs ya STILL can’t hold a decent job, if any, on xtra board, personal days denied, union has no muscle…employees are treated like trash. Good luck keeping any1 you put thru Atlanta. Only reason employees there now is cause they paid into RR retirement too long.

  7. The last thing you need in your training department is field management, ie trainmasters, road foreman, yard managers, road managers, MTO’s. Training new hire conductors, especially, and also probably trainman going into engine service is a TEACHING job. I have no experience with NS’s training department but another class 1’s had many talented, experienced and quality trainers and while I ran into a lot of field management in my years, some decent, some fair and some poor, none of them were prepared to teach. It’s kinda an important part of your operation and its vitally important to crew your trains with competent and SAFE T&E.

    The benefits package and how it’s “kinda” backloaded to the end of your career….it’s 2022. Many or perhaps most folks age 18-30’ish who would be a large segment of your hiring pool do not have the mindset that their new job on the railroad is one that they’ll retire from in 30 years. Even if you set aside the rough conditions and how the railroad might not treat you well, most of those folks aren’t going to get super excited thinking about the wonders of how the railroad retirement system is going to pay them such a better retirement than social security.

  8. Somebody send Mr Shaw a copy of this column. At least he would know why they have problems whether he does anything about it or not.

  9. His comment is very telling

    Shaw also contends the issues NS has experienced are not related to its implementation of Precision Scheduled Railroading.

    Look the mantra is “Increase investor equity as fast as possible by any means possible”. The end result was massive cutbacks of personnel , locations , operations and service. Run the trains longer and with fewer intermediate stops so they skip over locations that used to be closer to customers. End result is with fewer stops in between the customers wait longer for delivery and endure either feast or famine for those deliveries. The bean counters then squeeze out every possible penny out of bad service by then over charging customers for not getting cars loaded or unloaded fast enough then billing them again for them not being picked up fast enough.

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