Norfolk Southern Railway, The Thoroughbred Road

Although both competed in similar markets, in many ways the Norfolk & Western and Southern were a good fit for another. Perhaps the one most important factor the two lines had in common were their management styles, which allowed for a rather smooth transition when the merger took place.

While the Norfolk Southern Railway has often been criticized for its very structured management style which does not allow for much deviation, even amongst its own employees, this is the very reason why the company is successful and able to earn far more profits than its larger neighbor, CSX, all the while carrying a much lower operating ratio.

The 1999 acquisition of Conrail, jointly split with CSX, was perhaps the most important and critical time in the company’s history. If CSX had been allowed to purchase Conrail outright, not only would NS have been entirely surrounded but also it could never again effectively compete with CSX, even if it was able to run a railroad much more efficiently and affectively than CSX. NS had been interested in Conrail for some time because it would add an important addition the railroad needed, direct lines to the markets of New York City and Philadelphia which Conrail had been effective in developing and exploiting by becoming a intermodal (i.e., the movement of ship containers which can be moved via over-the-road trucks as well) juggernaut moving containers between Chicago and the Northeast.

Not only was intermodal the wave of the future but NS also did not contain an effective business in such and had CSX gained complete control of the Northeast it would only have been a matter of time before NS was gobbled up as well, mostly likely by a Western road (by rules of competition, CSX would not have been allowed to purchase NS and control the entire Eastern rail market).

So, thus began the battle for Conrail in the mid-1990s when CSX announced its intentions of purchasing the railroad outright. Through an aggressive bidding war NS was able to not only buy into Conrail but also was able to take the most profitable routes.

In 1999 the merger split was finalized, with a division of Conrail known as Conrail Shared Assets to operate a portion of the railroad in New Jersey jointly owned between CSX and the Norfolk Southern Railway. With the merger completed NS was able to diversify its traffic base much more broadly and became known as much for its intermodal business as for its traditional coal traffic in western Virginia, West Virginia, Kentucky, and Tennessee.

The Conrail merger at first overwhelmed both the Norfolk Southern Railway and CSX. However, NS was able to quickly stabilize itself and effectively meld Conrail into its system, much more so than CSX, which is still struggling with its half (although CSX is finally beginning to show improvements itself).

Today Norfolk Southern is a moneymaking machine, much like it was before Conrail and even during the days of its predecessors, the Southern and Norfolk & Western Railways. Given the company’s sound management and business practices the future looks bright for Norfolk Southern and it will be curious to see what happens with the railroad when the merger movement begins again at some point in the future.

For more reading on NS, consider the book Norfolk Southern Railway by author Richard Borkowski. The author does a great job of giving a general history of the railroad from its earliest beginnings in 1982 to its present day system that includes Conrail. Along with being filled with photographs if you have any interest in the present-day Norfolk Southern system you will very likely enjoy this book. If you're interested in perhaps purchasing this book please visit The Railroad Diamond by clicking the tab in the menu to your left marked "TRD Store".