Norfolk Southern
Careers at Norfolk Southern
Mission
Norfolk Southern Corporation’s mission is to be the safest, most customer-focused, and successful transportation company in the world.
Business segments
Norfolk Southern Corporation is a provider of rail transportation services for raw materials, intermediate products, and finished goods. The firm operates three reportable business segments:
- Coal – Supports the electric generation market, as well as the export, metallurgical, and industrial markets. Accounted for 17% of total operating revenues in 2015.
- General Merchandise – Composed of five major commodity groupings: chemicals; agriculture, consumer products, and government; metals and construction; automotive; and paper, clay, and forest products. Accounted for 60% of total operating revenues in 2015.
- Intermodal – Includes shipments moving in trailers, domestic and international containers, and RoadRailer equipment. Accounted for 23% of total operating revenues in 2015.
History
In 1838 City Point Railroad, a ten-mile rail line, was built to serve two Virginia towns. After merging with a few other railroads it became Norfolk and Petersburg Railroad (N&P) in 1860. Following the Civil War, N&P combined with Virginia & Tennessee Railroad and South Side Railroad to form Atlantic, Mississippi, & Ohio Railroad (AM&O). The next several decades saw further M&A activity.
In 1881 banking firm E.W. Clark bought AM&O and renamed it Norfolk and Western Railroad Company. At the time it mainly transported agricultural goods. However, its new leadership had an interest in minerals, which resulted in lines being built near coal deposits. Within four years, coal shipments passed one million tons, and by the end of the decade it accounted for most traffic.
In 1896 after a few difficult years, the company emerged from bankruptcy with the new name of Norfolk and Western Railway Company (NW). Over the next several decades it grew significantly, building lines through West Virginia as well as to Ohio and North Carolina. In the 1970s it experienced a raft of successs, with a 70% increase in revenues between 1974 and 1978 alone.
In 1979 NW’s leadership, feeling a need to grow, began discussions with Southern Railway (SR) for a merger. At the time SR was one of the most profitable companies in the industry; net income had tripled in the prior decade. It also had many territories complementing NW’s operations. In 1980 the two firms combined. Norfolk Southern Corporation was formed as a holding company for the entity.
Business model of Norfolk Southern
Customer Segments
Norfolk Southern has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at firms of all industries and sizes. That said, most of its customers are in the coal, metals & construction, agriculture, chemicals, automotive, and paper/clay/forest sectors.
Value Proposition
Norfolk Southern offers three primary value propositions: innovation, risk reduction, and brand/status.
The company embraces innovation as part of its culture. Its groundbreaking efforts include:
- Building the NS 999, a first-of-its-kind battery-powered switch locomotive
- Creating the “virtual” ethanol inventory system, a software program that tracks the amount of ethanol pumped and shipped for each customer; it is the first of its kind among Class 1 railroads
- Developing a container door tool that can close the doors of intermodal containers when employees are standing on the ground; it has helped keep freight moving and prevented injuries for employees mounting and dismounting rail equipment
The company reduces risk by maintaining high safety standards, as follows:
- It conducts behavior-based safety training for employees, which emphasizes using positive reinforcement in supporting safe workplace habits and continued safety process improvements
- It participates in Operation Lifesaver, a national organization focused on eliminating trespasser incidents and highway-rail grade crossing crashes
- It operates the “Protect the Line” reporting program, which makes it easier for rail fans, businesses, and communities to report issues to the police
- It offers a mobile app for the “Protect the Line” program which also enables reporting
The company has established a strong brand due to its success. It operates 20,000 route miles in 22 states and the District of Columbia. It provides service to every major Eastern seaport, 10 river ports, and nine lake ports, and operates the most extensive intermodal network in the East. It transports overseas freight through numerous Atlantic and Gulf Coast ports. Lastly, it has won a number of honors, including recognition as a top Military-Friendly Employer by Victory Media and the E.H. Harriman Award, which recognized railroads with low casualty rates, for 24 years in a row.
Channels
Norfolk Southern’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, and participation in conferences.
Customer Relationships
Norfolk Southern’s customer relationship is primarily of a personal assistance nature. The company helps its customers transport their goods while having limited interactions with them. It also operates the Norfolk Southern Training Center, which is an Accredited Testing Facility (ATF) for the American Welding Society.
The center administers testing programs for procedure qualification and maintenance renewal for welding codes; they are available to customers and the public.
Key Activities
Norfolk Southern’s business model entails developing and delivering its services for customers.
Key Partners
Norfolk Southern’s key partners are the suppliers that provide it with the equipment, material, and services it needs to run its railroad operations. It also maintains public-private partnerships with various government entities through which it has completed major projects.
These include partnering with 13 states to build the Crescent Corridor, a 2,500-mile rail infrastructure from the Gulf Coast to the East Coast; and participating in the Chicago Region Environment And Transportation Efficiency Program (CREATE), a partnership to add freight and passenger capacity and reduce congestion in the metropolitan Chicago area.
Key Resources
Norfolk Southern’s main resources are its physical resources, which include its 4,353 owned and leased locomotives, its 76,641 owned and leased freight cars, and its 64 automotive facilities.
Its Juniata locomotive shop is the largest locomotive repair facility in North America. It also maintains important human resources in the form of the employees that manage its railroad operations.
Cost Structure
Norfolk Southern has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is compensation/benefits, a variable expense. Other major drivers are in the areas of purchased services/rents and fuel.
Revenue Streams
Norfolk Southern has one revenue stream: revenues it generates from fees paid by clients for the transportation of their raw materials, intermediate products, and finished goods.
