Norfolk Southern Corp NSC

Tough Comps and Near-Term Share Losses Weigh on Norfolk's Intermodal Volume

From the start of the rail renaissance in 2004 through 2008, Norfolk Southern posted the highest margins of the US Class I railroads. Its operating ratio (expenses/revenue) deteriorated in 2009 during the Great Recession and remained stuck between 69% and 73% from 2010 to 2015. This fell short of the progress made by Union Pacific and Canadian Pacific, which lack Norfolk's exposure to Appalachian coal. However, by 2017, Norfolk was back on track, improving to an adjusted 60.1% OR in 2021 as it bolstered pricing execution and adopted precision scheduled railroading principles, which yielded more efficient use of locomotive assets and labor.