submitted to the SEC, Doc. 33388
VERIFIED STATEMENT OF D. MICHAEL MOHAN
IV. SERVICE BENEFITS OF THE ACQUISITION
A. Operations Overview
The blocking and train operations plans described in the Operating
Plan are intended to raise service reliability on the consolidated
system to levels provided on the NS system today and will create an
efficient and customer-oriented operation. Under the Plan, train
operations are divided into six distinct networks:
* General merchandise
* Automotive
* Coal
* Other bulk
* Intermodal
* Triple Crown Services
Each of these service networks was designed starting with three key
factors:
* What are the service and efficiency requirements of each movement;
* How much traffic volume is projected; and
* What routes and terminals are available to handle the projected
traffic?
The goal was to find the right combination of routes, terminals,
blocking and train schedules to best meet the specific service and
cost requirements of each movement. For some commodities, speed of
movement is critical; for others, the lowest possible cost is
important. In almost all cases reliability is essential.
To achieve these goals, new blocking strategies and train operation
plans were developed for each of the six networks. The key organizing
principles for each of the networks are as follows:
1. The General Manifest Network
Northeast-Midwest/Western Connections
Current Conrail operating practice is to concentrate classification
activity at four major hump yards: Selkirk, NY, Elkhart, IN, Avon
(Indianapolis) IN, and Conway (Pittsburgh) PA. Although there are
numerous classification yards of all sizes on the Conrail system,
these are the major hubs.
In the base period, most westbound carload traffic was classified at
two of these terminals, depending upon traffic origin and destination,
creating large blocks but slowing transit times. While this may
produce an efficient train operation suited to Conrail's current
needs, NS believes it preferable from a service reliability and speed
standpoint to minimize the amount of traffic which must be processed
twice at major classification facilities. At major classification
terminals, where many connections must be made and where congestion
can frequently occur, overall service reliability can suffer. This
diminution of reliability has an effect not only on customer
satisfaction but on equipment utilization as well.
In order to eliminate this double processing, the blocking and train
operation plan presented for general manifest traffic in the Operating
Plan concentrates classification activity at Conrail's Conway
(Pittsburgh) Yard, for traffic moving to and from East Coast points
and the Kansas City gateway in particular. Conway will also become the
classification hub for traffic moving to Southwestern points via
interchange with the Union Pacific ("UP") system at Sidney, IL.
Other westbound traffic blocked at Conway will move generally to NS's
flat switching yard at Decatur, IL. Decatur is a focal point for NS
operations, where traffic can be efficiently concentrated from Detroit
and the upper Midwest and then distributed to the Kansas City gateway,
or to the St. Louis gateway. Decatur is not a hump yard, and the
Operating Plan specifically contemplates assembling blocks from trains
arriving from the different routes on close connections. Traffic
volumes developed indicate that block size will be sufficient to
generate trains from Decatur that can be operated as far west as
Barstow, CA on BNSF and North Platte, NE on the UP without additional
intermediate classification.
This operation will further a number of objectives, including the
improvement of service reliability. First, extra processing at major
hump yards is eliminated. Second, shippers are afforded access to the
service-efficient Kansas City gateway. Third, traffic moving from
Detroit and the upper Midwest can be consolidated with traffic
originating in the East to provide efficient run-through type trains
that will eliminate terminal processing not only on the consolidated
NS system, but on Western carriers as well.
We believe this plan of operation will substantially improve service
reliability over present levels. Section IV.B. of this Statement
offers specific examples of how and why the improvements will occur.
Western Gateways/Midwest-Northeast
For east-west traffic moving between the Chicago gateway and Eastern
Seaboard points, again the goal was to eliminate double classification
at both Conway and Elkhart Yards to the maximum practical extent.
Elkhart is Conrail's system classification yard supporting the Chicago
gateway. NS intends to use Elkhart for a similar purpose. This
utilization of Elkhart will permit NS to eliminate classification work
at its own Chicago Calumet facility and permit the development of that
facility as a major intermodal terminal at some future point.
To eliminate intermediate handling at Conway, Chicago gateway traffic
flows were organized to generate long distance trains which will run
between Elkhart Yard and Northern New Jersey, bypassing intermediate
classification at Conway. The increased traffic generated by
consolidation of NS and its allocated Conrail lines will allow the
assembly of efficient run-through trains from Elkhart to many
Midwestern and Western destinations as well as to the upper Midwest
and Canada.
North-South
North-South manifest traffic service will also improve substantially.
The improvements will be attributable to the elimination of
interchange between Conrail and NS at Hagerstown, MD, Cincinnati, and
Columbus, OH. The improvement will also be due to the elimination of
excess intermediate terminal switching, which will be made possible by
the larger traffic volumes generated as a result of the consolidation.
For example, under current operating practice, Conrail traffic
originating from the Chicago gateway and Central Michigan is assembled
and classified at Conrail's Elkhart, IN facility. It is then moved to
Conrail's Buckeye classification yard in Columbus, OH, where it is
again reclassified and then assembled into a run-through train to the
NS interchange at Cincinnati. NS then handles the traffic to
Chattanooga, TN, where it must again be re-classified. The traffic is
currently subject to additional re-classification south of Chattanooga
depending upon its ultimate destination.
With larger traffic volumes available, and with an expanded route
structure, traffic can be assembled at Elkhart, IN for long distance
trains to operate direct from Elkhart to both Chattanooga, TN and
Macon, GA, eliminating intermediate classification at Buckeye and, in
many cases, at least one additional terminal. Traffic data indicate
that similar efficiencies will be obtained on northbound traffic from
the Southeast to the upper Midwest.
On the Eastern Seaboard, manifest traffic flows will improve for the
same basic reasons. Traffic data indicate that there will be
sufficient traffic to generate daily service from the Allentown, PA
hub to Knoxville, TN. From Knoxville, traffic will be handled directly
to the Memphis and/or New Orleans gateway, as well as to Macon, GA.
Traffic volumes are also sufficient to generate a new Baltimore to
Roanoke, VA service for handling beyond Roanoke.
Some of the more important new merchandise train operations are
highlighted below.
GMCWDE and GMDEPI are new trains offering excellent examples of the
service reliability improvement strategy. Blocks for BNSF and UP
assembled from traffic originating on the East Coast will be marshaled
at Conway and forwarded to Decatur, IL for close connection with
trains arriving from the upper Midwest. At Decatur, blocks will be
exchanged to assemble trains to run as far west as Barstow, CA and
North Platte, NE eliminating intermediate terminal processing on the
consolidated NS system and on western carriers as well.
GMELOI is a new 32-hour schedule from Elkhart, IN to Oak Island. It
will eliminate intermediate processing at Conway and offer direct
service for manifest traffic from the Chicago gateway to Northern New
Jersey.
GMOILI and GMLIOI will provide new service between Philadelphia,
Wilmington, DE, Baltimore, MD and points in the Carolinas and beyond
with a transit time of 30 hours. These and similar schedules will
generate additional traffic on north-south routes, which Conrail has
not emphasized because of the relatively short hauls between origin
and Southeastern gateways. The consolidated system will be strongly
motivated to maximize traffic potential in these new lanes.
GMSLKC, GMKCDESF, GMDEKCUP, GMKCDEUP are merchandise trains that will
be assembled at Decatur and at Moberly, MO to provide full run-through
trains with BNSF to Barstow, CA and with UP to North Platte, NE with
similar service in the reverse direction.
GMPISIUP, GMSIPIUP, GMFWSIUP, GMSIFWUP are new services that will be
operated in conjunction with UP over Sidney, IL between the East
Coast, the upper Midwest and Southwestern points. These trains will
operate directly to and from Conway Yard without intermediate
classification on an average 20-hour schedule. Traffic to and from the
upper Midwest will be assembled at Fort Wayne, IN and will move on
similar schedules.
GMELMA, GMMAEL, GMELCH, GMCHEL are new merchandise schedules between
the upper Midwest and Midsouth. The traffic studies indicate that
there is sufficient traffic to eliminate the current interchange with
Conrail at Cincinnati, as well as numerous intermediate
classifications. Long distance trains can be created in both
directions between Elkhart, Chattanooga, TN and Macon, GA that will
not be re-handled in route, reducing one to three days from current
transit times and improving service reliability.
GMALKX and GMKXAL are general merchandise trains over the Shenandoah
Route between Allentown, PA and Knoxville, TN with blocks for Macon,
Chattanooga and Birmingham. Estimated schedule times between Knoxville
and Allentown will be 33 hours. The new blocking scheme will
materially improve service reliability as well.
2. The Automotive Network
The Operating Plan offers an extensive discussion of service
improvements planned for automotive traffic. The organization of the
consolidated NS automotive network is predicated on generating
sufficient volumes of automobile or automobile parts traffic to
operate intact trains from origin to destination. When such volumes
are not available, traffic will be directed to a single automotive hub
at Bellevue, OH, where run-through automotive trains can be assembled
for Eastern, Western, and Southern destinations without further
handling at major classification terminals. Some of the improved
services are discussed below.
AUBVOI, AUBVDO, AUDOBV are examples of through automotive vehicle
schedules operating between the Bellevue automotive hub and the East
Coast. Trains will operate between Bellevue and Oak Island, NJ, or
directly to the Doremus Avenue automotive facility near Oak Island
with no intermediate handling.
AUBVRH and AURHBV will be important new automotive multilevel trains
operated from Bellevue to the Ridgefield Heights, NJ ramp on a
dedicated basis via the Southern Tier.
AUATBV, AUATOA, AUBVAT, and AUOAAT will handle automotive traffic on a
dedicated basis from the upper Midwest via Bellevue, OH to Atlanta.
These trains will handle both automotive parts and multilevels in each
direction, eliminating interchange and classification delays, thereby
improving service reliability. Trains will be operated from Bellevue
on an average 30-hour schedule, and from Detroit to Atlanta with an
average transit time of 35 hours. Depending on the traffic involved,
transit time savings will vary from one to three days.
AUOAKCSF and AUKCOASF will represent important new automotive services
to BNSF via the Kansas City gateway, operated directly to and from
Oakwood Yard in Detroit via Decatur.
AUBVKCSP and AUBVKCUP, AUKCBVSP, AUKCBVUP will handle automotive
traffic for Union Pacific on a schedule from Bellevue to interchange
at Kansas City of under 30 hours. Similarly, AUBVSIUP, and AUSIBVUP
will handle consolidated intermodal and automotive trains between
Bellevue and the new UP interchange at Sidney on a 15-hour average
schedule from Bellevue, and a 12-hour average service from the Toledo
(Airline) hub for intermodal traffic.
3. The Coal Network
The principal change in the coal network operations is the elimination
of circuity for coal traffic originating at Conrail mines in West
Virginia. This traffic must now move by Conrail's West Virginia's
secondary to Columbus, OH and then east over Conrail's mainline to
Harrisburg, PA for traffic moving to points generally north and east
of Harrisburg.
The Plan moves this traffic via Deepwater and Elmore, WV to Roanoke,
VA, Hagerstown, MD and Harrisburg, PA, eliminating an average 143
circuitous miles for each train so handled.
CLGRBE, CLBEGR, CLWLBE, CLBEWL, CLIABE, and CLBEIA all offer service
and equipment benefits to coal customers by eliminating the circuity
inherent in current Conrail routes. Coal traffic originating at
Conrail's West Virginia mines and destined to points generally north
and east of Harrisburg, PA will move via the new direct single-line
route from Deepwater to Elmore, WV, thence to Roanoke, VA, Hagerstown,
MD and Harrisburg, PA, depending upon train destination.
4. The Intermodal Network
As is current practice for both NS and Conrail, dedicated intermodal
trains will be operated between all points on dedicated schedules
wherever volume or business prospects justify. But unlike the current
Conrail system, the new network will focus on both longhaul and
shorthaul intermodal traffic, and NS will make the investments needed
to pursue the dual market strategy.
NS will add a new network onto the current Conrail system which will
be designed to handle shorthaul traffic efficiently between multiple
origin-destination pairs. There is a large amount of truck traffic
available for diversion in the Conrail service territory (see Verified
Statement of P. J. Krick). To accommodate shorter haul business, the
Operating Plan contemplates the construction of two major block
exchange facilities at Toledo (Airline) and at Harrisburg
(Rutherford). These two terminals will efficiently assemble and
distribute traffic on a close connection basis to points in the upper
Midwest and on the Eastern Seaboard.
New intermodal schedules are discussed in the Operating Plan, many of
which will be processed over these two hubs. Traffic to and from
Northern New Jersey will be handled at exclusively-served NS
facilities at Croxton and E-Rail in the Newark area. NS will also have
direct access to the Port Newark area and to the APL intermodal
facility at South Kearny.
Importantly for intermodal operations, the Operating Plan contemplates
the upgrading of Conrail's Southern Tier line between Buffalo, NY and
Croxton, NJ as a principal artery for double stack service moving
between West Coast points, the Chicago gateway, and the Eastern
Seaboard.
Some of the important intermodal services are discussed below.
IMERHB, IMHBER, IMHBKCUP, and IMKCHB are important new examples of
service to and from the expanded E-Rail intermodal terminal in Newark,
NJ. These four new trains are typical of service that will be handled
over NS's new intermodal hub at Rutherford, PA near Harrisburg, where
block exchange and train consolidation will occur. From Harrisburg,
long distance trains will be operated to and from the Kansas City
gateway and beyond.
The IMBLNO, and IMNOBL trains are new service offerings via the
Piedmont Route between Baltimore and New Orleans, with transit time of
50 hours. These important new schedules will offer intermediate
service to Greensboro, Charlotte, NC and Greenville, SC.
IMHBNO, IMNOHB are new intermodal trains via the Shenandoah route,
which will originate or terminate at the consolidation hub at
Rutherford. The trains will handle traffic from the New Jersey,
Philadelphia and Baltimore areas. Service will be provided for both
conventional intermodal traffic and doublestack between the points
named on the one hand, and Knoxville, Memphis, Huntsville, Birmingham,
New Orleans, on NS and Dallas via connection with the KCS at Meridian,
MS. Transit time between Harrisburg and New Orleans will be 46 hours.
IMBFBN and IMBNBF will handle intermodal traffic between Buffalo and
Binghamton, connecting to CP at Binghamton. New service to New England
points will also be offered over Harrisburg and Sunbury, PA as traffic
grows in conjunction with the haulage agreement executed between CP
and NS as noted above and in the Plan.
IMALKCSF, IMKCALSF intermodal service to the BNSF at Kansas City will
be provided by a pair of trains originating and terminating at the
Airline, OH (Toledo) hub. At Airline, connections will be made for New
Jersey, New England, Baltimore and Buffalo.
IMHBKCUP will be the intermodal service to and from the Union Pacific
via Kansas City originating at Harrisburg, PA and operating via the
Toledo (Airline) hub to Kansas City, with a transit time of 45 hours.
IMATER-1, IMATER-2, IMERAT-1, IMERAT-2, IMBLNO, and IMNOBL will
connect the Northeast and Southeast. NS currently operates two
intermodal trains daily between Atlanta and Newark. These new
schedules will originate and terminate from NS's expanded E-Rail
facilities. Transit time from the E-Rail facility to Atlanta will
average 32 hours. The trains will handle conventional intermodal and
doublestack traffic and will be routed via the Lehigh line. (Until
such time as clearance improvements are made, these trains will
operate via the Trenton Line.) Connections to Jacksonville and Miami
will be made in Atlanta.
DSCGCX-1, DSCGCX-2, DSCXCG-1, DSCXCG-1, DSCXCG-2, IMCXSL, IMSLCX are
representative of new schedules NS will operate as through service
from Chicago via the Southern Tier Route from Buffalo to Croxton, NJ.
Six intermodal trains a day will be operated in and out of the Croxton
terminal. Four of these trains will be doublestack, and the third pair
between Croxton and St. Louis will handle both doublestack and
conventional intermodal traffic. The St. Louis trains will connect
with the Kansas City trains at the Toledo (Airline) hub, providing
48-hour service between Northern New Jersey and Kansas City, with
traffic pre-blocked for western connections.
5. The Triple Crown Network
NS and Conrail already operate trains for an integrated Triple Crown
RoadRailer( system. The service is seamless from the customer's
perspective. The restructuring of Conrail and division of its routes
will require certain changes in current operations on both NS and
Conrail. It will also open up some new markets-- markets that Conrail
was reluctant to pursue because its rail hauls for Triple Crown were
often very short.
For the Triple Crown RoadRailer( operation, the most important changes
include:
* Rerouting one pair of Portside, NJ/Atlanta trains onto Amtrak's
Northeast Corridor to reduce schedule time between these points to
27 hours.
* Initiating direct rail service between the Ft. Wayne hub on the
one hand and Baltimore and Morrisville, PA on the other.
* Shifting the current Rochester service to Buffalo.
* Shifting the current Crestline service to Bellevue, with Triple
Crown trains re-routed between Ft. Wayne and Pittsburgh.
Use of the Northeast Corridor is required for some of these changes.
The NEC offers a far more direct route between Atlanta and the
Northeast than the current route used by TCS through Hagerstown.
RoadRailers( are compatible with NEC operations, and the new route
will save mileage and time, open the Carolina-Northeast market, and
make a new terminal at Baltimore economically feasible. NS is
discussing the details of this Triple Crown service with Amtrak.
TCATPS and TCPSAT are the new symbols for re-routed Triple Crown
RoadRailer( trains between Portside, NJ and Atlanta, GA, with new
intermediate service to Charlotte, Baltimore and Philadelphia. Transit
times for these trains, which will also traverse the Piedmont Route,
will be 27 hours.
TCBAFW, TCFWMV and TCMVFW will be the new Triple Crown symbols for
services operated on the Pennsylvania route for east-west traffic
between new terminals at Baltimore, MD and Morrisville, PA and Triple
Crown's Fort Wayne hub. At Fort Wayne, connections will be made to the
rest of the Triple Crown network. Average transit times from the
eastern terminals to Fort Wayne will be 27 hours.
B. Improved Service Reliability
Two attributes of the consolidated system Operating Plan that will
work to improve service reliability are route flexibility and the
reduction in intermediate terminal handlings.
1. Route Flexibility
Figures 15 and 16 represent the important route flexibility
characteristics of the route structure of the expanded NS. Figure 15
shows the principal east-west routes of the consolidated system and
demonstrates the available route capacity that results from the
transaction. The NS system will have two efficient through routes
between Chicago and New Jersey/Greater New York, which are actually
composed of five route segments:
* Conrail's former New York Central line from Chicago to Cleveland.
* Conrail's former Pennsylvania, Reading and Lehigh lines from
Cleveland to Northern New Jersey.
* NS's former NKP line from Chicago to Cleveland.
* NS's former NKP line from Cleveland to Buffalo.
* Conrail's Southern Tier Route from Buffalo to the Newark area.
Although the Southern Tier line will require some upgrading, the
remainder of the route structure is in excellent condition, and the
combination of former New York Central and Pennsylvania routes from
Chicago through Cleveland to Harrisburg and Reading, PA is
substantially all multiple main track and traffic control. With this
type of route capacity and flexibility, a high degree of service
reliability can be achieved, especially when taken in conjunction with
a blocking and train operation plan which is specifically designed to
maximize reliability. The transportation plan should provide a high
degree of customer satisfaction.
Figure 16 demonstrates a similar set of route attributes on
north-south routes of the expanded NS system. The Shenandoah and
Piedmont routes between the Northeast and Atlanta and other
southeastern points are substantially parallel. The Operating Plan
calls for corridor capacity improvement projects on the Shenandoah
Route between Roanoke, VA and Knoxville, TN. The upgrading will be
undertaken both to improve traffic flow to the Southeast and the
Memphis and New Orleans gateways and to permit the Shenandoah route to
function as a fully competitive route to the Atlanta area.
Under present circumstances, the availability of two such
substantially parallel, high
capacity corridors will materially improve service reliability between
the Northeast and southeastern points.
2. Examples of Improvement in Service Reliability
The following are six substantive examples of how and why transit
times and service reliability will improve after the transaction is
implemented. The improvements will occur because of interaction of a
number of factors.
First, the consolidation of operations provides larger traffic
volumes. The larger traffic volumes facilitate larger block sizes
which in turn provide the opportunity to operate more long distance
trains with a minimum of intermediate terminal classification.
Second, the Operating Plan itself is based on the elimination of
intermediate terminal classifications whenever that is practical and
economic. In the denser traffic lanes both east-west and north-south,
the Plan substantially accomplishes this objective.
Third, as discussed, the alternate route characteristics and
improvements both east-west and north-south will assure greater
reliability for the line haul portion of the transportation function.
Fourth, the service investments discussed in both the Plan and in this
Statement will serve to enhance reliability and help attract more rail
traffic while reducing costs.
Six examples of transit time and service reliability improvement are
discussed below and are shown graphically on Figure 17.
Philadelphia to Kansas City
Transit times between Philadelphia and Kansas City on a combination of
Conrail and NS routes currently average just under four days; on the
combined system, the average transit times in this corridor will be
reduced to two and one-half days. The consolidated system will
maximize service offerings via the service efficient Kansas City
gateway. Traffic volumes are projected to increase, and the increases
will allow reductions in intermediate terminal handlings. This will in
turn provide more reliable service and reduced transit times for
shippers.
Currently, traffic originating in the Philadelphia area destined to
the Kansas City gateway is classified by Conrail at Conway Yard at
Pittsburgh, and again at Avon Yard near Indianapolis. It is then
re-classified at TRRA's Madison Yard in St. Louis and then
interchanged to NS. NS then handles the traffic beyond to Kansas City.
Under the Operating Plan, the traffic will be initially classified at
Conway into run-through blocks for western carriers operating beyond
Kansas City. The traffic will be consolidated with other trains on a
close connection, flat switch basis at Decatur, IL. The trains
assembled at Decatur can operate as far as Barstow, CA on BNSF, or
North Platte, NE on the UP without further re-classification.
In this case, eliminating at least two intermediate classifications is
responsible for the reduction in transit time. Intermediate
classifications on western carriers will be reduced as well.
Detroit to Kansas City
Current transit times average just under four days, but under the
Operating Plan they will average just over two. Lengthy interchange
delays between Conrail and NS will be eliminated on this route.
Under current operating practice, traffic originating on Conrail in
the Detroit area destined for Kansas City is assembled in Detroit, is
moved to Elkhart, is classified there, and then moved from Elkhart to
Avon Yard at Indianapolis where it is reclassified. The traffic then
moves to TRRA's Madison Yard in St. Louis. It is again reprocessed at
that yard and then transferred to NS, which then advances the traffic
to Kansas City.
Under the proposed operation, NS will operate schedules directly from
Detroit to Ft. Wayne and Decatur, where blocks will be assembled and
exchanged to create run-through trains to western connections. Again,
intermediate terminal processing will be eliminated, transit time will
be reduced by half, and service reliability will improve.
Cleveland to Kansas City
Current transit time to Kansas City averages approximately eight days
from Conrail origins in the Cleveland area. In the future, transit
times on the new NS for this routing should be reduced to just over
four days. Multiple handlings at Avon, St. Louis, and Kansas City will
be eliminated, in favor of a single initial classification at
Bellevue, OH followed by block consolidation at Decatur, IL. Again,
long distance run-through trains will handle this traffic west from
Decatur.
Brownstown (Detroit), MI to McDonough, GA
Transit times will be cut in half, from an average of more than 4 days
to 2 days, for Ford after-market automotive parts traffic originating
at Brownstown on Conrail in the Detroit area and moving to McDonough,
GA, near Atlanta. Current handling has this truck-competitive traffic
from the Brownstown area classified at River Rouge Yard in Detroit,
again at Stanley Yard in Toledo, again at Buckeye Yard in Columbus,
then interchanged to the NS, which transfers the traffic between
trains on NS lines for handling to McDonough.
Under the Operating Plan, traffic originating at Brownstown would
undergo an initial classification at Oakwood Yard, and then run
directly to Inman Yard in Atlanta, GA. From that point, the traffic
would be forwarded in blocks to destination.
Savannah, GA for interchange to Chicago on the Wisconsin Central
Current transit time for shipments from the Savannah area destined for
the Wisconsin Central average just over 8 days. With the proposed
changes in operation, the transit times will be reduced to an average
of 3.6 days. The improvement lies in the elimination of intermediate
terminal switching, made possible by consolidating NS and Conrail
traffic volumes at Elkhart for handling through a single Chicago
gateway operation.
Under today's operations, traffic moves from Savannah, GA to Macon, GA
for classification. It is then forwarded to Chattanooga, where it is
reclassified. It is consolidated on-line and then forwarded to the
Wisconsin Central at Chicago.
After consolidation of operations, traffic can be operated from
Savannah to Macon, then directly to Elkhart, where it will be added to
traffic from Conrail points and assembled into a run-through train for
the Wisconsin Central.
Buffalo, NY to New Orleans, LA
The current transit time of over 8 days will be reduced to just over 6
days after the consolidation. Larger volumes and run-through train
operations in this case will eliminate intermediate terminal
processing at Chattanooga and various other intermediate handlings.
3. Service and Reliability Investments
NS expects to spend in excess of $500 million on construction and
upgrading projects related to its expanded system. These projects are
described in summary fashion below.
Corridor Capacity Upgrades
Corridor upgrades to improve service reliability and provide
additional capacity will require investment of nearly $120 million.
The table below indicates planned corridor improvement projects.
Corridor Capacity Upgrades
CORRIDOR
PROJECT
Siding construction, Extensions and Traffic Control
Lehigh Line
Supports Pennsylvania, Shenandoah and Piedmont routes
Bound Brook $ 3.6 million
Read Valley 3.1
Flemington Junction 3.2
Pattenburg 11.3
Other Lehigh Line 10.5
Reading-Harrisburg CTC 17.0
Shenandoah Route
Clark 1.8
Rural Retreat 2.9
Glade Springs 1.7
Bristol 1.4
Piney Flats 1.9
Rader 2.4
Mid-South Corridor
KD/Cumberland Falls 15.3
Southwestern Gateway Route
Andrews 3.5
Rockfield 2.6
Attica 3.5
Marshfield 3.5
Catlin 6.4
Sloan 2.8
Sido/Brunswick 10.7
Additional
Ft. Wayne 6.0
Angola 2.7
Bement .5
Reddick 1.5
Subtotal Corridor
119.8 million
Additional Track Upgrading
NS also plans in general to upgrade the level of utility of Conrail
core routes. Towards that end, $32 million in years one and two will
be invested to bring curve rail on Conrail lines up to NS standards.
An additional $10.3 million will be invested to upgrade the NS line
from Deepwater Bridge to Elmore, WV in conjunction with the re-routing
of coal traffic from Conrail lines in West Virginia via Deepwater,
Elmore, and Bluefield, WV to Hagerstown, MD, and Harrisburg, PA.
Further, $35 million will be allocated to upgrade the current Conrail
Southern Tier line between Buffalo and the Port Jervis area in
conjunction with greatly expanded service in that corridor.
Clearance Improvement
NS will also invest in major clearance improvement projects to
accommodate double stack and other dimensional traffic at a number of
locations including:
* The Pattenburg Tunnel between Bethlehem, PA and Northern New
Jersey
* Harrisburg to Baltimore, including an allocation of funds to raise
the catenary (power wire) on Amtrak's Northeast Corridor between
Perryville and Bayview, MD
* The Shenandoah Route
* Columbus to Cincinnati
Intermodal Facility Improvements
NS will invest $200 million in expanding or upgrading intermodal
facilities to handle projected traffic for the consolidated system;
the Operating Plan details the projects. Chief among them (and their
estimated costs) are:
* Constructing a new intermodal hub at Rutherford near Harrisburg,
PA for $40 million.
* Expansion of facilities in Northern New Jersey, principally the
E-Rail terminal, for $25 million.
* Construction of a new intermodal hub at Toledo (Airline) for $25
million.
In addition, $20 million will be allocated for new or expanded Triple
Crown facilities at Morrisville, PA, near Philadelphia, and Bellevue,
OH.
Finally, $30 million is budgeted for the construction of new
automotive facilities in the Philadelphia, PA and Baltimore, MD areas.
New Connections
The Operating Plan lists and explains planned new connections.
Approximately $25 million will be invested to provide these
connections necessary to form efficient, reliable consolidated through
routes. Connections proposed are shown below:
Connection Location
Estimated Cost of Construction
Alexandria, IN $ 1.4 Million
Butler, IN 1.5
Tolleston, IN .2
Sidney, IL 1.8
Kankakee, IL 1.4
Tolono, IL 1.6
Oak Harbor, OH 2.9
Vermillion, OH 2.6
Buffalo, NY 6.1
Hagerstown, MD 1.0
Detroit, MI .6
Columbus, OH 1.6
Bucyrus, OH 2.3
Total Connections 25.0
Mechanical Facilities
In order to implement the mechanical consolidation plan and improve
locomotive fleet reliability, approximately $102 million will be
allocated for the improvement of mechanical facilities. The largest
investments will be to upgrade, modernize, and increase the capacity
of a locomotive shop along the Penn Route between Enola Yard and
Conway Yard, PA (including those end points), at a location to be
determined, and to move the functions now performed at NS's Pegram
Shop in Atlanta to the Conrail shop at Altoona, PA.
