Norfolk Southern Corp. is well-positioned to "safely and successfully" weather the unprecedented situation presented by the COVID-19 pandemic, NS President and Chief Executive Officer James Squires said last week at the company's annual meeting of shareholders.
Squires addressed shareholders May 14 during the company's first virtual-only annual meeting, a board decision made in response to public health concerns and social distance guidance for the pandemic.
"We will get through the challenges ahead and emerge as an even stronger company," said Squires in a press release. "We'll continue to manage our assets well and control our costs. Our emphasis on superior service will continue to drive our long-term growth strategy."
In his remarks, Squires said the NS team's service to customers during the pandemic has required innovation and collaboration, ranging from equipping departments to work remotely, including most of customer service, to purchasing hand sanitizer from local distilleries in the midst of a nationwide shortage.
The company's "Reimagine '21" strategic plan rolled out in 2019 and built on the tenets of precision scheduled railroading is driving long-term "transformational" improvements in in operating efficiencies and customer service. A centerpiece is the railroad's TOP21 operating plan, which has changed how it operates trains on the network and contributed to record levels of train performance and service, Squires said.
"As a result of our transformation, we've set records for metrics such as train speed, terminal dwell and shipment constituency," said Squires. "We've decongested our yards and road network, allowing cars to turn quicker in the terminals and trains to move faster on network. Our success enabled us to dispose of 703 locomotives that are no longer needed because our network is more efficient — a strong sign that our strategic plan is working."
The gains in efficiency helped the railroad reach an adjusted operating ratio of 63.7 percent in first-quarter 2020, when excluding the charge related to the disposition of locomotives.
Although NS has withdrawn guidance for revenue and operating ratio in 2020, Squires said the company remains committed to its 2021 goal of achieving an operating ratio of 60 percent.
Squires said the economic downturn triggered by the pandemic will impact the railroad's business, noting that traffic volumes fell 11 percent in the first quarter and will continue to trend downward. While acknowledging NS has not been immune to COVID-19 disruptions, he reaffirmed his confidence in the company's overall financial standing, with access to ample liquidity and the lowest levels of capital expenditures since 2010.
The company is positioned for future growth opportunities, Squires said.
"By continuing to execute our strategic plan and provide superior service to our customers, we will move through this period successfully and be ready to capture opportunities as the economy recovers," he said.