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Norfolk South Corporation (New York Stock Exchange:NSC) CEO Alan Shaw told senators at a hearing in Washington DC on Wednesday that the rail company supports parts of two bipartisan rail safety bills that aim to improve the safety, including new rules for cars transporting hazardous materials.
Shaw told the Senate Committee on Commerce, Science and Transportation that the Railroad Safety Act and the RAILWAY Act include measures with the potential for significant improvement. He specifically pointed to funding for additional training, better advanced notifications, and accelerating the phasing out of older railcars. In particular, Shaw rejected provisions calling for two-person crews on all railway locomotives.
On the legal front, the state of Ohio sued Norfolk Southern (NSC) last week seeking damages and civil penalties. The company is also expected to face various class action lawsuits that are
For investors in the rail sector, the biggest question may be how much risk the controversial practice of precision programmed railways might be at in the future. TD Asset Management analyst Juliana Faircloth noted that the rail industry became quite investable through the implementation of precision programmed railways. The concept was pioneered by industry heavyweight Hunter Harrison, who at various times headed the Illinois Central Railroad, Canadian National Railway (CNI), Canadian Pacific Railway (CP) and CSX Corporation (CSX). The system emphasizes point-to-point freight wagon movements on simplified route networks. The simplified rail operating model leaves trains on a fixed schedule, rather than on different days of the week. The system and other cost reduction measures have led to better operating rates in the industry. It is unclear how deeply regulators and politicians will delve into the complexities of how railways run their business while looking at safety considerations.
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