Norfolk Southern Consolidates as Coal Volume Drops

Andrew Harrer/Bloomberg

Norfolk Southern Corp. said it will consolidate two of its operating divisions and idle portions of a 253-mile line in Ohio and West Virginia to lower costs and boost efficiency in the face of declining traffic on its coal shipping network.

The Virginia and Pocahontas divisions will be combined as of Feb. 1 with a headquarters in Roanoke, Virginia, leaving the railroad with 10 operating divisions after an existing divisional headquarters in Bluefield, West Virginia, is closed.

The Norfolk, Virginia-based company’s statement also said changing freight traffic patterns in the coal fields led to a decision to idle portions of a route between Columbus, Ohio, and central West Virginia. In September, operations were cut back on a 33-mile mainline in West Virginia.

Norfolk Southern, which has taken other cost-cutting steps in recent months, didn’t specify how much savings would result from the latest moves or the number of jobs that will be lost. In recent months, the railroad has also trimmed its Triple Crown Intermodal Service, consolidated offices and trimmed coal pier operations in Ohio in response to a decline of about 25% in coal shipments over the first three quarters of 2015.

“Consolidating the two divisions enables us to streamline operations and focus resources on high-return growth opportunities,” Mike Wheeler, senior vice president of operations, said in a statement. “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. At the same time, the railroad is nimble and adapts to changing market conditions.”

The combined division will be known as the Pocahontas Division and will include operations in four states over 2,581 miles of track.

Management and office staff in Bluefield will have the opportunity to transfer to Roanoke or seek employment elsewhere on the railroad, the statement said. Its freight yard in Bluefield, which mostly handles coal shipments, will remain open even though that freight has declined.