This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
8/12/2025
By Jeff Stagl, Managing Editor
“Total quality railroading.” “PSR 2.0.” “Project Home Stretch.” “Zero-based operating plan.” “War room.”
Talk to senior executives at Norfolk Southern Railway these days, and you’ll hear a number of terms and phrases that aren’t recognizable to many outside the railroad. But they’re highly meaningful to the Class I’s brain trust, and they’re vital to an operational and cultural transformation that’s been in the works at NS over the past year.
The railroad needed a makeover after a long period of turmoil that included the costly and contentious derailment in East Palestine, Ohio, in February 2023 and its aftermath; the months-long proxy battle with Ancora Holdings Group LLC last year that resulted in NS board changes; and the September 2024 firing of former NS President and CEO Alan Shaw and former Chief Legal Officer, Executive Vice President of Corporate Affairs and Corporate Secretary Nabanita Nag after it was determined they had an inappropriate relationship.
When the smoke cleared from all that adversity, NS wasn’t performing well operationally or financially.
Enter a number of counter moves instituted by NS President and CEO Mark George — who succeeded Shaw in September 2024 — and a senior leadership team that has been nearly completely remade over the past year-plus.
The current team now includes EVP and Chief Operating Officer John Orr (as of March 2024); EVP, Chief Financial Officer and Treasurer Jason Zampi (as of September 2024); Senior VP, Chief Legal Officer and Corporate Secretary Jason Morris (as of September 2024); and EVP and Chief Information and Digital Officer Anil Bhatt (as of August 2024). Ed Elkins continues to serve as EVP and chief commercial officer, and Annie Adams continues in her role as chief human resources officer.
The East Palestine accident prompted a reevaluation of the company’s safety culture, while the proxy battle challenged NS’ performance and leadership, leading to a C-suite turnover, says George. In the aftermath, the company was afforded an opportunity to reexamine its strategy, approach and guiding principles when it comes to safety, leadership, sales, customer service and a host of other functions.
NS needed to seize that opportunity to not only boost operational and financial performance, but to spur more growth. Thus, the transformation effort began.
And perhaps NS could one day transform in an even much bigger way — as in a merger with Union Pacific Railroad. On July 29, the two Class Is announced they reached an agreement under which UP would acquire NS in a stock and cash transaction.
Current operational, financial and safety performance levels are among best-ever marks, so the merger would come from a position of strength for NS, combining two railroads with strong core fundamentals and cultures, said George during a joint phone conference July 29 with UP CEO Jim Vena.
“We have a shared vision. This allows us to build on the momentum we created,” said George. “We can deliver something that no one else can. We are confident that this is the right partnership.”
But the potential marriage at best would be consummated in early 2027 — and that’s if it clears all regulatory and other hurdles in a timely fashion — so what NS leaders believe is required in the meantime is a new overriding mentality geared toward building on their railroad’s strengths and momentum.
And there’s one being ingrained in the organization at the moment that aims to spur improvements and help the railroad become a top service provider. NS is employing a quality mindset instead of a utility mindset that long has been prevalent in the rail industry, says George.
“A utility mindset accepts mediocrity. It’s accepting performance as it is [and] the idea that customers don’t have many alternatives, so there’s less urgency to improve,” he says. “On the other hand, a quality mindset is about striving for excellence, being responsive and treating customers with the same urgency and care you’d expect from top-tier service [providers] like Amazon or UPS.”
NS also is laser-focused on adopting what the company characterizes as total quality railroading (TQR). Now under development, TQR is rooted in the principles of total quality management (TQM), senior execs say.
A management approach focused on long-term success through customer satisfaction and employee involvement, TQM emphasizes continuous improvement in all aspects of an organization, including processes, products and services. Excellence is achieved by optimizing processes, fostering a customer-centric culture and empowering employees to contribute to quality improvements.
In May, NS senior executives visited with top leaders at Toyota — which is considered a TQM pioneer — and discussed how the automaker instilled that approach companywide.
“We only talked about TQM for a whole day. We saw how front-line employees are empowered to identify and implement improvements, and how quality is not just a theme — it’s a mindset that permeates the entire organization,” says George. “We came out with our eyes wide open. We knew we had to raise our game for our customers.”
TQR means every function — from operations to commercial efforts to technologies — must have higher standards, embrace accountability and strive for excellence, he says. And that means continually stressing to all employees that this is the new, cross-functional way of doing business.
“You have to get the word out. You have to get in people’s faces,” says George.
Moreover, you have to ensure leaders aren’t conducting presentation monologues with 30 Power Point slides versus holding meaningful conversations with workers.
“We want our leaders to ask a lot of questions instead of doing a lot of talking,” says George.
Ensuring everyone understands and embraces new expectations also is a challenge. Not everyone has the same energy or passion for change, says George.
“So, it’s about aligning the team and reinforcing the culture consistently,” he says.
NS is in the early stages of the transformation, and it likely will take a number of years to complete, George estimates.
“It’ll be a multiyear journey, but one that’s already yielding results in terms of service consistency, customer satisfaction and cultural alignment,” he says.
To that point, some shippers already are acknowledging that service performance is better. NS’ most recent Net Promoter Score (NPS) jumped about 18 points with top customers.
Conducted annually, the NPS is based on surveys of customers, who rate the railroad’s service on a scale from 0 to 10. Scores of 9 or 10 are called “promoters,” scores of 0 to 6 are deemed “detractors” and scores of 7 or 8 are considered “passives.”
The NPS is the percentage of promoters minus the percentage of detractors, with the passive scores dropped.
“We’re really seeing world-class numbers in terms of the response rate and our overall scoring. That’s a huge indicator that customers are noticing the difference,” says George.
One vital way NS is driving service improvements is by establishing war rooms. Located at NS’ headquarters in Atlanta, war rooms are staffed by workers from the craft level all the way to the vice president level who aim to take a “team of teams” approach to solve problems and find better ways to operate.
They share ideas for both short- and long-term issues while challenging the status quo to meet customer-centric, operations-driven objectives, senior execs say. Being together in a single location helps war room members more closely collaborate.
War room members can include anyone from field workers to operating department employees with PhDs to metallurgical engineers who take a multilayered approach to finding the right and best decision, says COO Orr.
Launched in mid-2024, the war rooms include two that operate 24/7 and are focused on “need for speed” and mechanical objectives, and shorter-term war rooms that are created to quickly troubleshoot an issue for a customer or unlock a new growth opportunity. For example, the mechanical war room is trying to solve the interface between steel wheels on steel rail and its impacts on rail and wheel wear, says Orr.
The level of engagement by involving those in the field and at headquarters is really a powerful mindset and interesting shift, says Orr, who previously held high-ranking operational roles at Canadian Pacific Kansas City, Kansas City Southern and CN.
“I’ve never experienced this at any of the railways I’ve ever worked for,” he says.
Another new experience for Orr: PSR 2.0. Precision scheduled railroading (PSR) emphasizes point-to-point freight-car movements on simplified routing networks and fixed train schedules. The operating strategy helps reduce the inventories of freight cars and locomotives and requires fewer workers to handle a given level of traffic.
Championed by Orr, PSR 2.0 still involves creating schedules, simplifying train plans and tightening connection standards. However, it leverages PSR in the digital age, understanding that there can be more inputs, says Orr.
“There is more of a chance to connect with other modes of transportation in a complementary network. There were more upstream and downstream value creations we could make with short lines, for example, which is very important to Norfolk Southern,” he says.
It’s all about taking a holistic view of railroading and railroading as an ecosystem that drives all performance indices.
“In any kind of precision railroading environment, particularly at 2.0, there is disruption. That’s why we have the TQR mindset where we look at disruption, we understand that happens and we triage it in real time,” says Orr.
The traditional trade-off with PSR is usually thought to be a better operating ratio and other financial and operating improvements at the cost of less-reliable service, long-term capacity issues and potential increased derailments and other safety risks associated with longer trains and crew fatigue. But PSR 2.0 can prompt financial and operational gains without sacrificing safety, Orr believes.
“I really want to create a platform that allows both safety and service to be anchors into the performance indices,” he says.
In terms of safety, NS has developed a three-tiered triad to ensure that safety leadership, learning and actions cascade effectively to the front lines, including safety summits, camps and walkabouts. A safety summit involves leaders coming together to align on high-level safety priorities and strategic goals; a safety camp involves cross-functional sessions that are conducted on philosophies, protocols and the science of safe work practices; and a safety walkabout involves real-time, in-the-field engagements between leaders and front-line teams to conduct drills and reinforce protocols.
Since safety camps were launched last summer, they have played a crucial role in the cultural transformation. NS so far has completed 50 two-day camp courses, investing in the development of thousands of railroaders, senior execs say.
The three cross-functional, feedback-rich and action-oriented safety get-togethers help ensure safety isn’t just discussed, but is practiced, reinforced and continuously focused organization-wide, they say. The gatherings have helped reduce mainline accidents by about 40% and spur continued downward trends in both the train accident rate and personal injury index.
To better involve workers in identifying and rectifying problems throughout the organization — including safety issues — NS is promoting a “speak up environment” that encourages employees to voice a concern and a way to address it, says Orr.
“They are rewarded for speaking up on tough issues so that we can get better and we can continue to improve. And I think when we do that, we’re really creating a fulfilling work environment,” he says.
For example, there is a high risk of criminal activity in NS’ distribution network, such as equipment break-ins in Los Angeles. An employee suggested equipment inspections be pivoted from the Midwest into the heartland where there’s a lower risk of break-ins and goods can be better protected.
“Accelerate the equipment through the risk point and move them on to market — that collaboration from speaking up to that issue was pretty impactful,” says Orr.
Something else that’s been very impactful? NS earlier this year introduced a zero-based operating plan designed to streamline train plans and resource allocation, which are critical to maintaining service levels during disruptive weather events and supporting commercial share gains.
The plan helped reduce over 100 weekly crew starts and trim final-mile dwell for more than 600 customers, enabling faster network recovery and improved cost control.
Short lines play an important role in the plan and in PSR 2.0, says Orr.
“Roughly 40% of what we handle from an industrial products perspective comes from short lines and has a first mile, last mile. Taking them into consideration as we build out our plan is a part of the fundamentals in PSR 2.0,” he says.
Partnerships with short lines are a key aspect of NS’ growth plans. The Class I connects directly with over 260 short lines and has business relationships with over 350 of them.
As of early 2025, NS had worked with more than 40 short lines through its Short Line Improvement Project to enhance online tools and daily visibility at interchanges, improve two-way communication and interchange planning, and eliminate bottlenecks. The gains are real-time performance data, daily interchange visibility, shared communication channels and more proactive coordination.
NS now is working to scale the program to all of its short-line connections. The Class I and its short-line partners have identified 6,000 carloads of growth that can be pursued by mid-2026.
NS also is working with short lines and others on Project Home Stretch, a pilot initiative that calls for providing customers full visibility into their inbound car pipeline and certifying which cars will be delivered on the next local train. The aim: to provide carload customers full transparency and shared decision-making capability in a shipment’s first and final mile.
“This reduces uncertainty and allows customers to proactively order cars, improving both network efficiency and customer operations,” says CCO Elkins.
NS is mapping, measuring and optimizing every touchpoint to improve each first- and final-mile interactions. Project Home Stretch is a collaboration between NS’ commercial team, operations and a group of pilot customers. No date has been set for a wider rollout.
Project Home Stretch addresses the “moment of truth” in a shipment’s last mile by making delivery timing transparent and actionable, Elkins says.
“We want to own the final mile. Customers want predictability and reliability, especially in the final mile,” he says.
In addition to the better shipment visibility, NS is working on transforming information technology (IT) systems to better support both operations and customer engagement.
To that end, the Class I is inventorying or mapping out every customer-facing process or IT tool — such as those used to order cars, pay waybills or obtain rate quotes — and trying to “ruthlessly optimize them,” says Elkins.
“For example, onboarding a new customer now takes less than a week, down from several weeks. Our goal is to match the simplicity and efficiency seen in the trucking and logistics industries,” he says.
Although the railroad has made progress with the inventorying/optimizing effort, there still is much work ahead.
“We’re well into the inventory phase and now moving into optimization. It will take months, but each step brings incremental benefits,” says Elkins.
To gain a better understanding of shippers’ overall needs — including IT functions — NS formed a customer advisory board late last year. The board features a diverse group of industry leaders and stakeholders who provide invaluable insights to further enhance the railroad’s customer experience, says Elkins.
The board meets regularly to discuss current initiatives, identify areas for improvement and explore new business opportunities. Members are from a wide range of industries, including the chemical, automotive, food production, paper and packaging, intermodal, energy, global logistics and recycling sectors.
NS plans to incorporate the board’s strategic guidance and feedback in operational and customer-service practices so the railroad can continuously refine its approach to best meet shippers’ evolving needs and expectations.
“Our board is different — we’re not just presenting to customers, we’re creating feedback loops to understand what’s working and what needs improvement,” says Elkins. “Our value proposition is simple: provide reliable service delivered by people you can trust.”
And to provide that level of service to more shippers, NS needs a more capable sales team to deliver, he says. Sales team members need two key skills: problem-solving and “systems thinking,” Elkins adds.
“Our best sales calls involve collaborating with customers to solve their problems. That requires understanding both how the railroad works and how our customers’ supply chains function,” he says. “Systems thinking ensures we’re solving problems holistically, not just shifting them elsewhere in the supply chain. You have to optimize the entire supply chain.”
With more capable salespeople, better ease-of-doing-business functions and more robust problem-solving solutions, NS can gain a larger and accelerated sales pipeline with higher win rates, he says.
The Class I already is noting an acceleration in industrial development (ID). Last year, NS supported more than 140 industrial projects worth over $4.3 billion in private investments. In first-quarter 2025, industrial activity increased 25% year over year, reaching a historic 517 projects in the ID pipeline.
“Our industrial development pipeline is the largest I’ve seen,” says Elkins. “While some projects are delayed due to macroeconomic uncertainty, we’re seeing growth in both pipeline size and win rate.”
Another aspect of NS that’s at a high point: the number of people who have joined the Class I over the past year or so.
“We’ve brought in a lot more external talent than we have traditionally done,” says Chief Human Resources Officer Adams. “We think about attracting candidates and onboarding candidates in terms of helping them understand the way we interact with each other and particularly the way our leaders lead.”
A big part of what HR has tried to accomplish lately is ensuring that new employees as well as established workers adhere to NS’ SPIRIT values, she says. SPIRIT — which stands for Safety, Performance, Integrity, Respect, Innovation and Teamwork — are core values and a guide for everything done at the railroad. It encourages pushing boundaries, rising to challenges and delivering with purpose.
Although SPIRIT was launched in the mid-2000s, some of the language in the values was adjusted to the point where some connection was lost, says Adams.
“The values weren’t resonating with people in the way they once had. So, we did some focus groups and talked to a bunch of employees,” she says. “They capture who we are at our best, and we should just refocus on that and quit trying to tinker with the language. They are important about who we are and how we want to operate.”
Given all the completed and ongoing changes, it’s clear NS is striving to be a top-notch rail operator and a top-tier service provider. The path the Class I is on appears to be the right one given the compliments that CEO George is receiving of late from many shippers.
“I hear a lot of positive feedback. The fact that customers are giving us more of their business, especially in industrial products — that’s the ultimate compliment,” he says.
So, moving forward, what will be the biggest focus for NS leaders? Balancing controllables and uncontrollables, says George.
“We need to anticipate demand to plan to hire and manage resources. At the same time, we must maintain momentum — communicating, listening and staying close to the front lines,” he says. “Leadership isn’t just about giving direction; it’s about asking questions and learning from those doing the work.”
Email questions or comments to jeff.stagl@tradepress.com.