2015 SUSTAINABILITY REPORT

supply chain value

economic engine

COMMERCE

SUSTAINABLE TRANSPORTATION

Corridor Strategy For Growth

Since the mid-2000s, intermodal freight has been one of Norfolk Southern’s fastest growing market segments, particularly for goods moving in the 600- to 1,200-mile length of haul. This development reflects a trend in U.S. freight transportation, as more shippers choose rail as a cost-effective and environmentally friendly mode of moving products to market.

Through strategic network investments, Norfolk Southern is positioned to take advantage of this business shift. Increasing freight rail capacity contributes to sustainable business across the supply chain. Norfolk Southern’s rail corridors promote fuel conservation and greenhouse gas reduction, helping customers reduce transportation-related emissions, and they support economic development in the states and communities where we operate.

Norfolk Southern’s Key Intermodal Corridors

Corridor Traffic At a Glance

2014 Growth Over 2013

(Click on tabs to view more data)

Meridian Speedway
Corridor


Norfolk Southern partnered with Kansas City Southern Railway on a 2005 joint venture to create this 320-mile corridor. Linking Meridian, Miss., and Shreveport, La., the corridor offers shippers the shortest, fastest rail route between the Southeast and the West Coast. For Norfolk Southern, the speedway shaved two days of rail transit time between California and Atlanta, opened up markets around Dallas and greater Texas, and armed the railroad with a coast-to-coast transit time that is faster than single-driver trucks.

Crescent Corridor


This 2,500-mile corridor, spanning 11 states, forms the backbone of the company’s intermodal network, connecting shippers and consumers from New Orleans, and Memphis, Tenn., to northern New Jersey. During 2012 and 2013, Norfolk Southern opened four new intermodal terminals on the corridor — in North Carolina, Tennessee, Alabama, and Pennsylvania — to increase rail capacity and compete head-to-head with long-haul trucks in the railroad’s East Coast markets.

Pan Am
Southern Corridor


Created by a 2009 joint venture with regional railroad Pan Am Railways, this corridor extended Norfolk Southern’s reach into New England markets between Albany, N.Y., and the greater Boston region. The corridor gives the railroad access to business in Connecticut, Massachusetts, New Hampshire, New York, and Vermont. Since forming the corridor, the railroad has expanded intermodal and terminal capacity in the Albany area, opened a new automotive terminal at Ayer, Mass., and added capacity at the existing Ayer intermodal terminal.

Heartland
Corridor


This 896-mile corridor, opened for double-stack intermodal trains in 2010, runs through Virginia, West Virginia, and Ohio. It primarily serves shippers of import and export freight, providing global connections between the Port of Virginia and Columbus, Ohio, and westward to the Chicago Gateway. The company opened a new intermodal facility in Columbus to increase freight capacity on the route.

A Public-Private Solution to U.S. Transportation Needs

While trucks, barges, and airplanes operate on infrastructure paid for by taxpayers, Norfolk Southern and other U.S. freight railroads operate almost exclusively on track infrastructure they own, build, and maintain with their own money. In 2014, Norfolk Southern invested around $850 million on track maintenance-of-way costs.

With U.S. freight transportation needs growing, the federal government and many states have entered into public-private partnerships with railroads to accelerate the construction of rail projects that generate public economic, environmental, and social benefits.

Norfolk Southern led the rail industry in this innovative approach with the Heartland Corridor. In 2005 legislation, Congress cited the Heartland as one of 25 transportation projects nationwide with the potential to facilitate international trade, relieve traffic congestion, improve transportation safety, and address critical national economic and transportation needs. In addition, Virginia, West Virginia, and Ohio supported the project.

Since then, Norfolk Southern has entered into a public-private partnership to expand freight capacity on the railroad’s Crescent Corridor. In Chicago, Norfolk Southern participates in the CREATE public-private partnership to improve the flow of freight and passenger rail and highway traffic in one of America’s busiest rail hubs.

Through these partnerships, federal and state governments contribute a percentage of costs based on public benefits generated. These benefits include jobs and tax revenue; economic development; less congestion and fewer truck-related accidents on interstate highways; reduced maintenance and construction costs of roads and bridges; a decline in fuel use and greenhouse gas emissions; and more opportunities for passenger rail.

Saving Fuel, Emissions on Heartland Corridor

The Heartland Corridor project, which raised the heights of 28 tunnels for double-stack intermodal trains, shaved an average 250 miles of transit time from two more circuitous routes that linked the Port of Virginia to the Midwest.

The shorter route has saved the railroad millions of gallons of diesel fuel and significantly reduced carbon emissions. Based on average rail fuel efficiencies calculated from studies done by the Federal Railroad Administration, Norfolk Southern estimates the Heartland route has saved the company 16 million gallons of diesel fuel and avoided more than 161,000 metric tons of CO₂ emissions since opening four years ago.

Trucks vs. Trains

The savings are even more dramatic when trains are compared with trucks.

Between 2011 and 2014, Norfolk Southern trains moved more than 1 million intermodal units over the 896-mile Heartland — or more than 21 billion revenue ton-miles of freight. Using FRA’s fuel-efficiency data, those trains consumed an estimated 58 million gallons of diesel fuel and emitted 583,494 metric tons of CO2.

If shippers had moved those units by highway, trucks would have consumed an estimated 220 million gallons of diesel and emitted 2.2 million metric tons of CO2 — nearly four times more fuel and emissions than rail.

A Virginia Agreement

Norfolk Southern signed a 15-year agreement with the Virginia Department of Rail and Public Transportation that includes returning a percentage of state funds contributed to the Heartland Corridor project if rail volumes do not meet specific annual commitments. As part of the public-private partnership, Virginia contributed $9.75 million to help fund the cost of raising the height of four tunnels through the mountains of southwest Virginia. The total cost to clear the full corridor for double-stack traffic was around $191 million.

In the first four years of the agreement, Norfolk Southern has surpassed the guaranteed minimum annual volumes by a factor of two to three. The agreement is based in part on the public benefit of removing trucks from interstate highways in Virginia; every intermodal container on rail represents a truck not on the highway.

Track Improvements Double Train Speed at Key Crossroads

In early May 2014, a concerned citizen called Norfolk Southern to report that a train was speeding through downtown Roanoke, Va. That was not the case. The person had witnessed a train moving over a section of newly improved tracks.

The $17.2 million project, known as the Randolph Street project, modernized and streamlined an important rail crossroads. The improvements enabled trains to double their pass-through speed to 30 mph from 15 mph.

As many as 50 to 60 Norfolk Southern trains pass daily on four main lines that converge there, including a key line segment where two of the railroad’s primary intermodal freight lines — the Crescent and Heartland corridors — intersect.

The Randolph Street project reflects ongoing efforts to increase network capacity, efficiencies, and productivity through strategic infrastructure investments. The project also highlights the value of public-private partnerships to improve freight rail capacity. Virginia contributed about 60 percent of the project’s costs through its Rail Enhancement Fund, and Norfolk Southern designed the rail improvements to accommodate Virginia’s plan to return Amtrak passenger service to downtown Roanoke. Public benefits include economic development opportunities, job creation, and reduced highway congestion that results by shifting freight from highway to rail. Environmental benefits include reduced fuel consumption and greenhouse gas emissions.

More Efficient Intermodal Moves for Ohio Businesses

With the March 2015 opening of the high-capacity Pickaway East-West Connector, Ohio businesses have a more efficient gateway for moving goods to and from Norfolk Southern’s Rickenbacker Intermodal Facility near Columbus — a terminal opened in 2008 as part of the Heartland Corridor.

The $31 million multiphased highway project improves truck access between the intermodal facility and State Route 23 for door-to-door movement of goods. The project included widening an existing two-lane road and construction of a new bridge over rail tracks. The public-private partnership included funding from Norfolk Southern, the Ohio Department of Transportation, the Ohio Rail Commission, the Mid-Ohio Regional Planning Organization, the Ohio Department of Development, and a federal Transportation Investment Generating Economic Recovery grant.

Norfolk Southern opened the $70 million Rickenbacker facility to meet expanding demand for intermodal service from businesses in central Ohio and the Midwest. The facility has capacity to handle approximately 210,000 containers annually.

CREATE Rail Flyover Generates Benefits

Norfolk Southern and other major North American freight railroads have contributed financially to the CREATE public-private partnership. The $3.8 billion Chicago Regional Environmental and Transportation Efficiency project is designed to reduce rail and highway congestion and add freight and passenger rail capacity in the metropolitan Chicago area. Other partners contributing are the U.S. Department of Transportation, the Illinois Department of Transportation, the Chicago Department of Transportation, and passenger carriers Amtrak and Metra.

In fall 2014, the partial completion of one major CREATE project, the Englewood Flyover, eliminated a major chokepoint for freight rail traffic moving along Norfolk Southern’s Chicago Line, the company’s busiest main line. The project improved freight traffic at the railroad’s 47th and 63rd Street intermodal facilities and enhanced the movement of freight going to yards operated by interchange rail partners that handle customer freight moving to and from western U.S. markets.

The flyover is a bridge that carries Rock Island District Metra commuter trains over the Chicago Line. Before the flyover was built, more than 70 Metra trains and approximately 60 Norfolk Southern trains had to pass daily through the same at-grade crossing. During transit commute hours — three hours in the morning and three hours in the afternoon — Metra trains had exclusive use of the crossing. That meant Norfolk Southern trains had to wait, creating congestion and delays in delivering customers’ freight. The flyover increased main line capacity by more than 30 percent, turning the six hours of wait time into work time for freight trains.

“Intermodal trains are able to come in more quickly and drop their containers, and that results in improved availability of the units to customers,” said George Marx, director intermodal operations in Chicago. “It’s improved the operating velocity at our intermodal facilities and for our interchange traffic with the western carriers.”