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F500-2021-307-Norfolk Southern

Norfolk Southern is primarily an industrial and consumer products railway transporter and is based in Norfolk, Va. Its Norfolk Southern Railway Company subsidiary serves every major container port in the eastern United States.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-283-Norfolk-Southern

The Virginia freight railroad ships coal and industrial products on its rail network and serves every major container port on the East Coast.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Norfolk Southern operates a network of railroads mostly across the Eastern U.S. and the Midwest. The company’s freight operations span 22 states and deliver 7 million carloads annually of products ranging from agricultural to consumer goods. Norfolk Southern is increasingly investing in the growth area of intermodal shipments, which combine rail and truck transportation of goods. The company also deals with overseas freight via its connections to major ports on the Atlantic Coast, the Gulf Coast, and the Great Lakes.

Q1 2025

Q4 2024

Norfolk Southern (NSC): Company Profile, Stock Price, News, Rankings

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Norfolk Southern

norfolk southern

Morning, ladies and gentlemen, and welcome to Norfolk Southern Corporation First Quarter twenty twenty five Earnings Conference Call. At this time, note that all participant lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. Also note that this call is being recorded on Wednesday, 04/23/2025. At this time, I would like to turn the conference over to Luke Nichols.

Good morning, everyone. Please note that during today's call, we will make certain forward looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or future performance of Norfolk Southern Corporation, which are subject to risks and uncertainties and may differ materially from actual results. Please refer to our annual and quarterly reports filed with the SEC for a full disclosure of those risks and uncertainties we view as the most important. Our presentation slides are available at norfolksouthern.com in the Investors section, along with our reconciliation of any non GAAP measures used today to comparable GAAP measures, including adjusted or non GAAP operating ratio.

Please note that all references to our prospective operating ratio during today's call are being provided on an adjusted basis. Now turning to slide three, it's my pleasure to introduce Norfolk Southern's President and Chief Executive Officer, Mark George.

Good morning, and thank you everyone for joining. Representing Norfolk Southern with me today are John Orr, our Chief Operating Officer Ed Elkins, our Chief Commercial Officer and Jason Zampi, our Chief Financial Officer. We're looking forward to updating you on our Q1 twenty twenty five results. There's a lot to be pleased with this quarter as we delivered results in line with what we signaled to you while dealing with a vicious winter, including 18 storms that were far more consequential to our network than Helene was last fall. John will share details on that impact and how we quickly restored fluidity to our network in order to serve our customers with minimal disruption.

Our network resiliency was evident again, thanks to great planning and execution by our team. And we did it safely with lower injury and accident rates as our team continues to embrace safety as a core value. Despite all this disruption and absorbing 35,000,000 of storm restoration costs that Jason will detail, we delivered 8% EPS growth on an adjusted basis, driven in part by $55,000,000 of labor productivity savings. I'd like to thank every member of the Thoroughbred team for their hard work and dedication during the quarter. Teamwork and a focus on safety and service excellence are what's propelling our progress.

We're also proud of our commercial agility, staying close to our customers as we and they dealt with weather related impacts to operations, East Coast port rebalancing, and volume fluctuations in anticipation of tariffs. Our behaviors and performance are increasing our customers' confidence in our service product, and that's driving meaningful share gains. We're doing a better job anticipating market and customer needs, taking on the right long term growth opportunities in the most strategic lanes. We are dressed and ready to handle volume growth. Overall, Norfolk Southern is doing what we set out to do.

We remain focused on what we can control, that's safety, network performance, customer service, and costs. I'll hand it off to the team now to provide more color on the results, starting with John.

Thanks Mark and good morning. Starting on slide five, as you said, the weather tested the resolve of the operating team in what was both a challenging and rewarding quarter. We faced significant weather across most of our network. Mark mentioned 18 storms. Let me tell you about one of them.

Depicted in slide five is our Heartland Corridor. A flash flood caused the Tug River to rise almost instantaneously to its highest flood levels since 1977. This impacted a 100 mile stretch of our mainline that moves over 50 trains a day. Depicted in the top left is a fill failure. The restoration of this one location required 8,700 tons of rock, the equivalent of about 700 truckloads of material.

The repair to this remote yet critical location was accomplished in just fifty two hours. Meanwhile, 87 miles down the same river system, the floodwaters and debris surged against this overpass. That's the image you see depicted in the lower left. Debris and high water jeopardize the bridges structural integrity. We fought for two days against the surging water before being able to remove the debris and restore the bridge deck.

There were 35 additional outages caused by the Tug River Flood that were simultaneously repaired over a four day period. During the quarter, we incurred $35,000,000 in extraordinary expense to respond to storms, which adversely affected our operating ratio. While we can't control the weather, we can control our preparation and our response. And I am extremely proud of the entire team. Turning to slide six, Our injury ratio was down 13% year over year and 15% sequentially.

This is the lowest quarterly ratio in over a decade. Train accident frequency reduced by 43% year over year. Our pursuit of safety excellence and speak up culture is showing tangible results. Turning to slide seven, we delivered year over year network and productivity improvements across the board. Terminal dwell AAR train speed, car velocity and locomotive productivity improved meaningfully year over year.

Turning to our service metrics. While we improved merchandise trip plan compliance, our time sensitive intermodal composite was the most impacted by the storms. Exiting February, intermodal service stabilized and in recent weeks, we are at target. These numbers alone don't tell the whole story of our performance. The first half of the quarter was the story of the operations center and the engineering department planning and executing responses to the many disruptions.

The second half was the story of commercial, mechanical and transportation teamwork. For example, commercial and operations created an inspirational March Madness initiative to catch up Lambert's Points quarterly export coal volume. They collaborated with our supply chain and terminal partners to optimize coal sequencing and dumping at the pier. Together, we delivered both our forecasted and backlog volume efficiently. Safety and service excellence are evident in these results.

Turning to slide eight, the team is proving the art of the possible. Our PSR two point zero transformation is unlocking network value and delivering on our financial commitments. Our zero based operating plan rolled out in the quarter. Phase one simplified train plans, tightened connection standards and strengthened our competitive resource and cost structures. For example, we netted a reduction of over 100 weekly crew starts.

This generated yields in train and T and E productivity, Reduced final mile dwell for over 600 customers and reduced overall transit. Meanwhile, enterprise resources streamlined our materials management and distribution network. They're reducing material handling, expenses and all the while increasing productivity. They're relentlessly pursuing every opportunity to eliminate waste and drive efficiencies across all spend categories. This includes further improving energy management solutions and implementing advanced fuel initiatives.

For example, our HPT improved by 13% year over year. This resulted in a fuel efficiency record for the fourth consecutive quarter. We are aligning more closely to our suppliers while optimizing internal and transactional processes, positioning NS to fully leverage our scale and drive greater value for the long term. Our PSR two point zero transformation simultaneously delivered safety, service and resilience. We powered through the adversity in the quarter and we are carrying that great momentum into Q2.

Well, thanks John and good morning everyone. Now let's move to slide 10 and you'll see that the overall volume for the first quarter rose 1% year over year despite the winter weather conditions that we and our customers experienced during that period. And while total revenue was flat, continued fuel surcharge headwinds masked an otherwise solid revenue performance as total revenue less fuel was up 2%. RPU less fuel was up 1% year over year despite sharply lower export coal pricing. Specifically within merchandise, volume fell from a year ago as gains in our chemicals and ag businesses were offset by weakness in our metals and our construction segment.

The period saw a 4% increase in merchandise RPU less fuel, delivering another consecutive quarterly record in that metric. In intermodal, we achieved a 3% year over year volume increase with gains in both domestic and international while premium continues to face market pressure. Overall, intermodal RPU less fuel was up slightly for the second consecutive quarter due to stabilization in truck pricing. Now let's turn to coal where lower export coal prices drove RPU less fuel lower by 3%. Partially offsetting these shortfalls were volume gains in our utility business thanks to strong electricity demand and support from higher natural gas prices.

Okay, let's move to slide 11 for our market outlook. It's clear that we're in a dynamic economic environment. For our merchandise markets, we expect strength in autos to continue in the near term. Although announced tariffs could be a headwind to volumes for the remainder of the year. Manufacturing activity has been building in many markets and we will stay close to our customers as trade policies unfold.

Strength in our chemicals markets such as waste and plastics along with our intense focus on recapturing market share give us confidence that we are well positioned to mitigate some of the uncertain market conditions that we see. Staying very close to our customers is the key here. When we look at our intermodal markets, we expect continued normalization of our East Coast share and are watching shipping patterns very carefully as trade policy evolves. If tariffs drive prices for international goods higher, import demand may soften and we're staying close to that. Truck capacity remained steady throughout the quarter, which maintained a flat trend for our price outlook.

Coal prices continue to be pressured as the industry is expected to see tempered production amid significant uncertainty around export trade. In the near term, we expect the current trends in the utility markets to continue. On slide 12, industrial development activity continues to increase with strong interest from firms seeking to expand domestic production as well as international companies seeking to locate new manufacturing facilities in The United States. Sectors such as steel manufacturing, metals fabrication, food production, and construction materials saw an increase in project activity through the latter half of the first quarter with momentum continuing to build through April. However, we're also noting cases where decision timelines appear to be extending as customers evaluate the macroeconomic environment.

Considering all the uncertainty, I am encouraged by our ability to maintain our quality service as volumes increased as we closed out the quarter. And I'm encouraged by our trajectory moving forward. As our customers navigate this uncertainty, we are by their side offering a service product that can help reduce their costs in their supply chains. We sincerely appreciate the partnership that we've built with our customers and are striving to grow trust and to earn more of their business every single day. And with that, I'm going to turn it over to Jason to review our financial results.

Thanks, Ed. Slide 14 reconciles our GAAP results to the adjusted numbers that I will speak to you today. Insurance recoveries continue to exceed the incremental cost of the Eastern Ohio incident, which resulted in a net benefit of $185,000,000 in the quarter. Total insurance recoveries to date are nearing $1,000,000,000 with less than $100,000,000 of coverage remaining. Adjusting for the net recovery related to the incident, operating ratio for the quarter was 67.9, which includes 120 basis points from storm restoration costs.

From a bottom line perspective, EPS was $2.69 Moving to slide 15, you'll find the comparison of our adjusted results versus last year and last quarter. As we previewed during the quarter, the impacts of typical seasonality coupled with the higher than expected winter storm restoration costs drove a sequential increase in the operating ratio of 300 basis points. From a year over year perspective, despite the elevated storm costs and flat revenues, our productivity initiatives have continued to take hold, and we generated 200 basis points of operating ratio improvement, with operating expenses down 3% on higher volumes. Let's take a closer look at the $68,000,000 year over year expense decline on slide 16. The $35,000,000 of incremental storm restoration costs are embedded in multiple line items, including comp and bin, purchase services and materials.

We are focused on what we can control, and our operational momentum and execution on productivity initiatives delivered cost savings across the board. Labor productivity was strong in the quarter. That, coupled with timing of land sales, helped offset an incentive comp adjustment related to 2024, increased pay rates and higher claims costs. We continue to gain traction on our fuel efficiency. And importantly, our purchased services and rents were down $30,000,000 in the face of 3% higher intermodal volumes.

All of these actions support our cost takeout goals. Summarizing our adjusted financial results on slide 17, the strong operational momentum that has been the foundation for continued productivity savings led to 8% improvements in both net income and EPS over last year. These results together with ongoing balance sheet repair led to the resumption of share repurchases and we bought back nearly $250,000,000 of shares in the quarter. The 200 basis point improvement in the operating ratio and this team's ability to deliver productivity savings in any environment gives us a lot of confidence as we move through these uncertain times. I'll turn it over to Mark to wrap up.

All right. As you have heard, we successfully navigated the first quarter to recover from the significant weather impacts to our network. At the same time, we delivered better service on higher volume, all while continuing to drive greater productivity. Now, as it relates to our guidance on slide nineteen, one thing that we can control is our costs, and we remain highly confident in our ability to extract at least 150,000,000 as evidenced by our strong momentum that continued in Q1. At this time, there's no clear information on how tariffs may impact our end markets and revenues.

So we are reiterating our full year 3% revenue growth guide and 150 basis points of OR improvement, while acknowledging that there is uncertainty on the horizon. So to drill a little deeper on that point, we will be keeping a close eye on the end markets, staying in close communication with our customers. There may be cases where we see changes in freight origin and destination, as well as changes between customers, some who may be on our network or on others. We may benefit in some instances or suffer in other cases, but our growing track record of service excellence and agility positions us to continue to capitalize on all opportunities. So as the effects become clearer in the months and quarters ahead, we will calibrate and communicate with you accordingly.

But right now, our guidance remains intact. So with that, let's open the call for questions. Operator?

Thank you, sir. Please press followed by 2. Out of consideration to other callers on the line today, we ask that you please limit yourself to one primary question. First, we will hear from Ken Hoexter at Bank of America. Please go ahead, Ken.

Hey, great. Good afternoon or good morning, sorry. I guess, if let's just start up with the operating ratio, just given performance on the cost savings. And I guess I'd like to hear your thought on upside or speed of targets. But my question would be if you you know, if 120 basis points of cost, that would have gotten you to a 66.7 without that.

Normally, seasonally, I guess, if you or Jason could talk about that, two fifty basis points, it looks like, is your long term trend. So, is that a good benchmark to think you started 66.7% and so the second quarter should be in the 64s? Is that a good way to at least think about your potential here?

Jason, why don't you talk a little bit about the cadence?

Yes. Thanks, Ken. So, we're very focused on our full year guidance. As Mark laid out here, delivering that 150,000,000 of productivity and cost reduction savings as well as the 150 basis points of margin improvement on that 3% revenue growth. So as you pointed out, we had some headwinds from the abnormally harsh winter weather as well as 50 basis points of headwind from fuel price.

So while there's obviously some uncertainty on the macro side, we've got a lot of good momentum from our strong service product. And as you saw this quarter, we've made really good progress towards those productivity targets. So, think about it, Ken, from this perspective. I think the math would tell you the remainder of the year needs to be like under a 64 operating ratio to hit our targets. I would just say that it wouldn't it's not going to be evenly spread over each quarter.

I'd expect the second quarter to be better than normal seasonality off of the 67.9 here that we just posted in the first quarter. But beyond that, I really don't want to get into too much more specificity on a quarterly basis given this environment of uncertainty we're in.

Thank you. Next question will be from Chris Wetherbee at Wells Fargo. Please go ahead.

Hey, thanks. Good morning. Maybe wanted to ask about yield. So merchandise stepped up. I know we have a record there.

Intermodal was up year over year for the second quarter in a row. Can you talk a little bit about what you're seeing in the pricing environment? Obviously, service has improved quite a bit. I'm just kind of curious how much you think this is sort of a Norfolk specific dynamic where you're seeing some opportunity to play some catch up on price and what the market's kind of given you.

Hey, thanks for the question. This is Ed. We've been successful taking price in the merchandise side of the business really on the back of improving service. And for us, that's been the headline for the last three quarters. Our customers are trusting us more and more and really offering opportunity, both on the price side as well as on the volume side, to expand our portfolio with them.

On the intermodal side, we're taking what the market will give us basically, and that's really a sideways price right now. It's very flattish, and we'll see where it goes with all the uncertainty going forward here. But we're still taking price predicated off the value of the service that we're providing, and we feel good about our trajectory there.

Obviously the seaborne met coal pricing is the biggest challenge that eats away at a lot of that other good core pricing performance.

Clearly in the coal side, seaborne prices have been a drag and there looks like they're going to be a drag for a few more quarters.

Next question will be from Scott Group at Wolfe Research. Please go ahead.

Hey, thanks. Good morning. Just to follow-up there, the merchandise yields up 4% ex fuel. Is that more about mix or is that sort of core price accelerating? And then I understand the point about just all the uncertainty.

So I guess I just wanna get your perspective. In an environment where volumes start declining, if that's what happens, what's your ability and willingness to start to further reduce costs? Like, volume if we wake up and volume's down 5% or something, like do you think you can reduce headcount and cost in line with that?

Sure. It's hard to remember it now. It's been so long. Merge yield.

Was around 4%. On the merchandise side, it's a function of both, really. We've been successful in taking share in a couple of key markets, notably in chemicals, and that's coming from a variety of sources. That's good for the portfolio. At the same time, we're beating our plan for same store price right now, and feel good about that.

And all the indications that we see from our customer base are that, number one, they're seeing increasing value from the product that we're delivering. And number two, they're looking for ways to save money, and we're clearly a great place to do that. To your second question, I'll start, and then I'm gonna well, I'll hand it off to Mark here. Go ahead.

Yeah, no, that's hypothetical, if you get a five percent, that's a 5% decline.

It's pretty cataclysmic scenario. We are not fully volume variable as an enterprise, as you know. You'd have to go and do some draconian things if you wanted to be volume variable. I think we learned a harsh lesson when we tried doing that in 2020 with the onset of COVID, and then was unable to respond quickly. So the reality is we're going to keep our eye on the external outlook.

Meanwhile, we're doing really great stuff looking at being more productive and efficient. And you see the way we've been handling the volume last year while actually dealing and absorbing attrition in our direct headcount. We're continuing to do that. That's part of the math this year as well. I'm not going to respond to a 5% decline scenario, but just know that we've got a lot of productivity runway left.

John and the team are doing some great stuff and others are doing great stuff inside the organization, in IT and technology where we're trying to drive and find productivity savings. So we're keeping our eye on the volume trends right now. We hear a lot of the same stuff in the marketplace about potential for recession. We felt really bad last, sorry, we felt really good last week. We felt pretty bad yesterday.

Today, we feel a little more encouraged. That just shows there's no way to predict where we go right now. We're in a really uncertain spot, but we haven't seen negative trends yet that really alarm us or cause us to do anything. That said, we're scenario planning, and you know, stay tuned.

Next question will be from Brian Asenbeck at JPMorgan. Please go ahead.

Hey, good morning. Thanks for taking the question. First, a quickly follow-up on the land sale. It sounds like maybe there's some timing, so I just wanted to see if that was pulled forward or if that was still in the full year expectation, just came a little bit earlier. And then maybe John you can just talk about the network performance.

Looks like it's bouncing back pretty well in terms of resiliency so wanted to see how you're getting about that, if you think that's sort of the new normal under the two point zero program and what sort of market opportunities that brings you because clearly your peer is having some different issues that they're not able to recover from as fast as what seems like you are. Thank you.

Yeah, hey, this is Jason. I'll start off on the land sale question. We continue to think about land sales in that 30,000,000 to $40,000,000 range for the year. But as you've seen last couple of quarters, can be lumpy and that's kind of what you saw here. But we still think we're going to be in that range for the full year.

John? Yeah. And I would say I'm never satisfied with how the operating environment is at any given time. So, that's a curse my team has to endure. But I can tell you I'm very, very pleased at the strength and resilience demonstrated coming out of the storms.

We recovered quickly between the storms and prepared ourselves for the next round. And I think the efficiencies in the network were really driven by the investments we've made in our capital over years, in our pulling back and managing our resources, so that we had the resilience where we can inject locomotives and cars where the market responded faster than other places so that we could serve our customers and be there for them. Then as we're doing today, pulling them back out. So, we deploy locomotives. Now we've got 40 back in storage serviceable ready for the next round of surge either in a challenge or in an opportunity.

So, I think the creating efficient transportation networks and really driving volume and resources to meet our GTMs is what we're all about. One of the things I think is really important is that we're in the midst of all of this. We're still in the midst of transformation and we're introducing rigorous standards across the organization relative to our new zero based plan. We're structurally engineering out cost and improving our customer service offerings. As I said earlier, we've accelerated over 600 customer last mile capabilities, and we're putting in our yard operating plans and our mechanisms to really create more visibility for a customer and more visibility for our service offerings at the last mile or first mile.

And I think that helps Ed because that visibility is in collaboration with the commercial team.

Yeah, look, over the past four or five years, we've lost share to a lot of different competitors. And our teams are working every single day to unwind those alternatives as quickly as possible and bring that freight back to NS. And you know, that's really, like I said earlier, on the back of good service that our customers can count on. And it's working.

Yeah, consistent service begets share gains.

And it's playing out right now real time. So we're happy about that.

Thank you. Next will be Jonathan Chappell at Evercore ISI. Please go ahead.

Thank you. Good morning. Ed, you pointed out the 50 I'm sorry, John, you pointed out the $55,000,000 of productivity improvements. And if we look at Jason's slides, it's all under the comp and benefit line item. As we think about getting to the 150,000,000 and more importantly, the plus component of that 150 Does that all still fall in comp and ben as we go through this year?

Or are there other opportunities in purchase services, rents, materials, etcetera, where you think is more of a second half opportunity to reap the productivity benefits?

Yes. So, this is Jason. I'll start off here. We've committed to that $550,000,000 of productivity and cost reductions over this three year time horizon. And last year, we got more than we promised at right around $2.90.

You look this quarter and we've highlighted the two most significant areas. So, one is labor productivity that you just called out, the other is fuel efficiency. So, those are the big pieces this quarter. So a couple of different pieces there. On the labor productivity side, I think last year we were probably more harvesting that from a T and E perspective.

Now it's really more broad based across all of our different crafts. But you'll also see productivity really throughout the income statement here. As you mentioned, purchase services, that's a great example. Equipment rents, see the improvements we have there just due to a more fluid network. So, it's really across the board here.

We've just called out kind of two of the bigger ones here on the slide for you.

Yeah, and you're right, Jason. And I'll tell you, we can talk about high numbers and we can talk about our what's next strategies, where we continue to develop the skills and capabilities of people, where we're really harvesting ROIC on our capital investments and focusing on the diversity our vendor relationships and really strengthening and narrowing down our purchasing capabilities. A lot of those things are building momentum. And then we layer on top of our zero based plan phase one, phase two, phase three. That's a continued elevation of our service offering, our commitment to rigorous standards across the organization, and really pushing the boundaries of a transportation ecosystem.

But then you go down a little deeper and you think about what are we controlling? From from our disciplined approach on service and looking at things that impede that service, we we get into war rooms. And our war room, the very first war room that we started was on reliability of our over the road trains. From there, our fleet management, our freight car costs, all of those things are coming down and flowing out. Kudos to to Brian Barr and Ryan Clark, who are leading our mechanical department.

Our freight car maintenance in the quarter was down significantly. And you have to go back to Q one twenty three to find anything close to that. And when you do that and you think about all of the investments that we've made in field operations technology and more sampling we're doing to really be driving down that cost means we're getting to the issues before they come across the road. Same with loss and damage. Our safety camp investments, 43% down in our FRA accident ratios and 60% down in our non FRA accident.

So, below the line activities, where customer goods and shipments are less disrupted. The the goods that they're trusting with are are leaving and departing and arriving in the same state we get them. That's reducing our our overtime or purchasing services or resources there. All of the things that that cost when you disrupt the natural flow of transit. And even as we get into how we have more reliability and availability of people, our taxi usage is down 15,000,000 in

go back over three years to find that. That means our speed is translating into more direct and indirect value. So, all of these value streams give us a lot of confidence. Jason and his insights into the finance and the linkages to our activities between the two of us are really driving attention and attentiveness to that $150,000,000 commitment. And I would say it's natural we get a little bit more in the first quarter, but we're to keep these initiatives driving value all through the year.

Next question will be from Jason Seidl at TD Cowen. Please go ahead.

Thanks, operator. Mark and team, good morning, and congrats on a good earnings in a challenging environment. Wanted to focus a little bit sort of on your agility going forward to manage cost? Because Mark, I think you did a great job of pointing out the uncertainty in the marketplaces and what you might be faced with challenging going forward. I was hoping maybe you could talk to us a little bit about some of the levers you guys could pull, and how nimble you think you can be to sort of manage those markets.

Thanks, Jason. Appreciate the question. We're doing really great stuff. John just really listed a handful of things that we're focused on. We're getting down into details now when he's talking about taxis and meals and overtime and recrews.

In the meantime, on the other side of the ledger, we've got IT that's doing tremendous work trying to find cost reduction and efficiency opportunities. And then on the other administrative functions, recall we did a RIF reduction in force last year that took out 10% of our administrative, really it's about 9% of our administrative staff at the headquarters. So we've been looking at everything and we continue to look, we're not done. We all are contributing to trying to find opportunities to streamline the company and be more nimble, more efficient. We know we're in uncertain times right now.

We don't really know how it's going to manifest yet on the top line, as I've mentioned before. We haven't seen the evidence yet, but we are scenario planning, and we're getting into details, as you heard John give you some of those examples. Thank you. John, do you want to add to Yeah,

I would say we talk in terms of the kind of the big five or six initiatives that are big rocks, T and E, mechanical and equipment, purchase services and others, fuel and as Mark said, even in the G and A. So, are core cost takers that we're looking at, but we're keeping our resources active and in reserve to be able to respond to any kind of market that's changing, whether it's a spot market or whether it's some emerging condition that gives us more volume. And we've also accelerated our onboarding capability for new hires. So, we've compressed the time it takes to bring on a new conductor, for example, take them through the technical training, get them ready for a productive life with NS. And so even our responsiveness on that front has been streamlined and optimized.

So we're a much different railway than we may have been a few years ago. And the agility that we've created across all these streams is really giving us pretty good strong confidence that we're ready to take on the world as it evolves.

Yeah, and you know, those are great examples. And even last week, you're right, we tightened controls around the use of consultants. So again, we're getting into every detail here where I want to see everything that our team is doing with regard to engaging new consultants. So we're getting into some details here, and we're getting ready to hunker down.

Well, that sounds good. How should we think about headcount overall as we sort of head into these uncertain times? I mean, are you guys sort of keeping it flat and maybe thinking about furloughs after you see any impacts?

Look, I think what we've done and I mentioned this before is we've been managing really well, our 83 hiring locations and crew locations with attrition and very controlled hiring practices. Because we do have a window into attrition in the future just based on the age of our crews that are out there. We know we're going to have some attrition. So we're backfilling with hires in the training pool, but we're being very controlled, very measured for the 83 specific locations, keeping an eye on volume and where that volume is going to show up on the network. So it's a very delicate balance that we've got to do.

So what you've seen is that we've actually had treated down while we've taken on more volume last year. That was very strategic, and that's another form of productivity. Volume absorption is another angle of productivity that we don't give the same credit to, but it's a very important part of the recipe here. I think in terms of this year, I'd be surprised if you see much growth in headcount, if any at all. And certainly if top line pressures manifest in the back half, I would imagine we'd have tricked down quicker.

Norfolk Southern Q1 2025 Earnings Call Transcript | Fortune

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Fortune 500 Power Moves: Which executives gained and lost power, Sept. 6–12, 2025

/2025/09/12/fortune-500-power-moves-sept-6-12/

John Kell

e.l.f. Beauty’s CDIO says she’s responsible for AI’s foundation, but that these tools aren’t an IT mandate

/2025/09/10/e-l-f-beautys-cdio-says-shes-responsible-for-ais-foundation-but-that-these-tools-arent-an-it-mandate/

Phil Wahba

Why Walmart’s U.S. CEO says staffing levels will remain steady even as A.I. becomes a bigger part of work

/2025/09/09/walmart-ai-jobs-brainstorm-tech/

Jessica Mathews

DoorDash CEO Tony Xu says path to autonomous deliveries filled with ‘lots of pain and suffering’ but company is nearing first inning of commercial progress

Norfolk Southern (NSC) Q1 2025 Earnings Call Transcript

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