“I am determined to make this right,” Norfolk CEO
told the Senate’s Environment and Public Works Committee. “Norfolk Southern will clean the site safely, thoroughly and with urgency.”
“We will be in the community for as long as it takes,” he said.
The Feb. 3 derailment, which involved 11 cars carrying hazardous materials that ignited and fueled fires, has brought scrutiny on the railroad industry and on Norfolk Southern in particular.
The National Transportation Safety Board said Tuesday that it has opened an investigation into Norfolk Southern’s safety culture given the number and significance of accidents involving the railroad since December 2021. The move came after a dump truck collided with a Norfolk Southern train at a rail crossing at a Cleveland steel plant, killing a conductor.
Senators at Thursday’s hearing called on the company to commit to pay whatever it takes to clean up the town of East Palestine, Ohio, to take steps to prevent future accidents and back bipartisan legislation that would subject railroads to stricter regulations.
“It’s Norfolk Southern’s responsibility to keep its workers safe on the job,” said Ohio Sen.
a Democrat. “And this company has failed to do its job over and over and over.”
Norfolk Southern has pledged to overhaul its safety practices and announced new initiatives, including adding 200 temperature detectors to parts of its track where existing sensors are at least 15 miles apart.
“It is clear the safety mechanisms in place were not enough,” Mr. Shaw said Thursday. “We are not waiting to act. We are going to make our safety culture the best in the industry.”
The railroad also plans to pull back from an industrywide push in recent years to maximize efficiency, according to prepared remarks shared by Mr. Shaw before Thursday’s hearing.
“We deliberately moved away from a singular focus on operating ratio, which is a common industry measure of efficiency,” he said. “Instead, we are taking a more balanced approach to service, productivity and growth.”
Mr. Shaw, who took over as CEO in May, said instead of furloughing workers during periodic economic downturns, the company will invest in its workforce and provide additional training. Norfolk Southern employed an average of about 19,000 people in 2022, compared with about 27,000 five years earlier, according to securities filings.
The derailment occurred after a wheel bearing on a hopper car overheated and failed, according to federal officials. The sensor that showed the wheel bearing had exceeded a critical temperature threshold was about 20 miles away from the prior one. It was during the crew’s attempt to slow down the roughly 150-car train that the wheel bearing on the car failed, the NTSB said.
There is no federal standard that determines how close together railroads should place temperature sensors along their tracks, and it is also up to railroads to establish how hot the equipment has to get to alert crews to stop the train and inspect it.
Politicians on both sides of the aisle have pushed for stricter oversight of the industry in the wake of the derailment, with Sen. Brown and Sen. J.D. Vance, a Republican, backing legislation that would subject railroads to new federal safety regulations and fines for any wrongdoings.
On Wednesday, a trade group representing major freight railroads said the operators plan to add about 1,000 temperature detectors across their key routes. The group, the Association of American Railroads, also said the railroads agreed to stop trains and inspect bearings whenever the reading from a temperature detector is 170°F above the ambient temperature. That is roughly in line with Norfolk Southern’s thresholds.
Norfolk Southern is one of the country’s largest railroad companies, transporting freight from coiled steel to corn syrup across nearly 20,000 miles of rail across the eastern U.S. Ohio has some of the operator’s busiest tracks. The company has a market capitalization of roughly $50 billion.
Like its competitors, Norfolk Southern in recent years has adopted an operating strategy known as precision-scheduled railroading that involves using fewer trains and running them on tighter schedules. The strategy, pioneered by the late railroad executive
won over Wall Street by cutting costs and boosting profits, lifting shares and valuations of the major operators.
The approach has also drawn criticism from railroad workers and customers who say the push to operate more efficiently has come at the expense of safety and service.
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As part of what Mr. Shaw has described as an effort to rebuild the company’s safety culture, Norfolk Southern said starting this week it would hold a series of safety briefings for all its employees to review procedures and discuss what went wrong in recent months.
There are no plans to replace any of Norfolk Southern’s senior management, people with knowledge of the matter said.
Also Wednesday, Norfolk said it is establishing a safety training center to prepare first responders for disasters involving hazardous materials.
Health officials and residents of East Palestine have expressed concern about the health impact of the derailment, after which cars carrying hazardous material caught fire and the railroad burned vinyl chloride from five tanker cars to prevent an explosion.
The Environmental Protection Agency issued an order that requires Norfolk Southern to clean up contaminated soil and water, among other things. Mr. Shaw said in his prepared remarks that the company has recovered and transported more than 3.5 million gallons of potentially affected water from the site and more than 2,300 tons of affected soil.
Mr. Shaw said Thursday that all studies so far indicate the air is clean to breathe and the water is safe to drink.
Mr. Shaw said Norfolk Southern had committed $20 million to help more than 4,200 families affected by the accident. The CEO personally created a $445,000 college scholarship fund for local students in East Palestine.
“There are no strings attached to our assistance—if residents have a concern, we want them to come talk to us,” he said Thursday. “I understand how much East Palestine means to each resident, and we are committed to making this right.”
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