Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 4, 1994 TAG: 9412060014
SECTION: BUSINESS PAGE: C1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Long
The Norfolk and Western, primarily a coal-hauling railroad, had its headquarters in Roanoke before it merged with Southern in 1982 to form the Norfolk Southern. Coal still is the most important commodity NS carries, accounting for 27 percent of its $4.46 billion in transportation operating revenue last year.
William Bales, NS's Roanoke-based vice president of coal marketing, said he doesn't see a lesser role for coal in NS's business for several decades.
Norfolk Southern's management is bullish on the coal business, said Bales. As evidence of that, he noted that NS is buying new aluminum coal cars, building new coal storage silos at Hampton Roads, modifying the equipment at the piers to speed up coal loading into ships quicker and putting new bodies on 3,000 coal gondolas a year at NS's East End car shops in Roanoke. Bales couldn't readily put a dollar figure on the expenditures but put them far into the millions.
Marketing teams are working with coal suppliers and coal buyers and are looking at markets that in years past NS didn't think worth serving, Bales said. "We're finding markets to meet the supply capability we have."
As with other commodities, he said, the railroad is looking for innovative ways to serve its coal customers and Bales has increased his marketing staff by 10 percent to help find new ways to do that.
In Boone County, W.Va., for instance, NS built a cable-driven conveyor system to bring coal across a steep mountain to a rail siding five miles away. The rail route made possible by the conveyor cut the round-trip to a Carolina Power and Light plant in Hyco, N.C., by 346 miles - 40 percent - saving the utility's customers money and making the mining company's coal easier to sell.
At the rail siding, a new automated batch loading system fills the cars with coal from a silo . Electronic tags on the cars' sides tell the loading equipment exactly how much coal to put in. Less space is wasted, so fewer cars are needed.
And in Alabama in January, Norfolk Southern will begin loading coal from a Pittsburg & Midway Coal mine into intermodal-style containers, dubbed ColTainers, and haul it 24 miles to a "port," where each 24-ton container will be transferred to a truck chassis and hauled the remaining nine miles to Alabama Power's Gorgas plant.
Norfolk Southern may see its highest profits ever in 1994; and while coal will retain its place as the biggest contributor to NS's bottom line, the railroad's coal business has been better: in 1991 when record coal revenues were set and in 1992 when record tonnage was hauled. A weak international market has held coal back this year.
A drop in world coal prices of roughly $5 a ton over the past two years has kept U.S. producers away from NS's coal-export docks in Norfolk. Export shipments will be roughly the same this year as last, 25 million tons. But exports should increase in the months ahead because Europe, which has replaced Japan as the primary market for NS's export coal, is beginning to pull out of a recession.
Shipments of steel-making coal within the United States are down because of the closing of coke ovens, but NS is moving about 6 percent more coal to electric utilities this year to make up for stockpiles depleted by the year's harsh weather, Bales said. Overall, the railroad will carry about 122 million tons of coal in 1994, compared with 115 million last year, he said.
The movement of western coal to Eastern markets has provided a new source of business. The company is currently picking up 5 million tons a year from the Union Pacific at Memphis and moving it to a Georgia power plant. The hauling of lower-sulfur western coal is expected to grow with the implementation of more stringent federal clean-air laws.
NS's car shops in Roanoke have been kept busy in recent years building rail cars for the company's coal hauls and that work will increase next year.
The car shops, located just east of Williamson Road between Shenandoah and Norfolk avenues, and the adjacent locomotive shops are considered among the best in the rail industry. Independent contractors and officials from other railroads looking for ways to improve their own operations pay frequent visits.
Inside the car shops, sparks fly from welding machines as overhead cranes move the ends and sides of what will become 30-ton coal gondolas into place on the assembly line. Computerized torches cut 5/8-inch sheets of steel to size, and giant presses punch holes in them for rivets. Outfitted with hard hats, goggles and ear plugs, dozens of workers - including three women - are in constant motion. The noise is eerie and deafening.
The car shops, which include a foundry, wood mill and blacksmith shop, are for the most part self-contained. "We can make most anything we want to make in these shops," said manager Bill Pickle.
The shops have been busy putting new gray bodies on the chassis of older coal cars, at the rate of 13 a day. Next year car production will increase to 14 daily, said Donald Mayberry, NS's vice president for maintenance, who with Bales is one of two NS vice presidents based in Roanoke.
Roughly 1,150 of the 5,000 people in Mayberry's system-wide department work at the Roanoke car and locomotive shops or NS's repair shops at Shaffers Crossing off 24th Street Northwest. They account for a third of NS's 3,200 employees in the Roanoke Valley.
NS management has been willing over the years to invest in new and better machinery for the shops, Mayberry said. The railroad continues to look for ways to do things better with fewer people, but he doesn't foresee much change in employment at the Roanoke shops.
Because of the Roanoke shops' reputation, the jobs they provide would likely be safe in the event of an NS merger with another railroad, NS officials say. Meanwhile, Norfolk Southern's 106,000 freight cars and 2,000 locomotives offer plenty of work. "I think these shops here are fairly secure," said Mayberry.
by CNB