NS CEO Shaw defends company strategy in letter to employees

Ancora Holdings Group's push to overhaul Norfolk Southern Railway's (NS) board and top management "does not change our daily objectives to run operations reliably, consistently and productively," NS President and CEO Alan Shaw said yesterday in a letter to company employees.

Shaw was responding to Ancora's announcement yesterday that it was nominating eight independent candidates for election to the NS board and proposing candidates to replace Shaw and the company's chief operating officer. The investor group, which holds a large equity stake in NS, cited what it views as the board's "poor decisions with regard to the company’s leadership, safety priorities and strategy."

In his letter, Shaw said the company is "fully committed" to implementing the strategy the company deployed in December 2022, as well as making the railroad safer. He also outlined the company's next steps as the Ancora Holdings proxy battle plays out.

The company is making progress since it adopted its strategy, Shaw said.

"We delivered our best intermodal service in over three years in the fourth quarter of 2023 and grew volumes in intermodal by 5% on a year-over-year basis," he wrote. "We have also significantly improved train velocity and dwell in the fourth quarter, with both metrics reaching their best levels in several years. While there is more work to do to improve our overall performance, customers are seeing our progress."

On the safety front, NS is implementing its six-point safety plan, addressing findings of an independent safety consultant, installing "cutting-edge" digital train inspection portals and incorporating feedback from labor union leaders, Shaw said, and noted that the railroad achieved a 42% reduction in mainline accident rate year over year in 2023.

Although Shaw's letter didn't mention it, many safety measures were implemented after the NS train derailment that occurred in February 2023 in East Palestine, Ohio.

Shaw concluded the letter by thanking employees for their hard work.

"I am incredibly proud of the Thoroughbred Team and all that we do to serve our customers, shareholders and communities," Shaw wrote. "Collectively, we are advancing a better way for the rail industry that positions us all for long-term success, and we’re notching progress every day."

Click here to read Shaw's letter in its entirety.