Eastern Railroad Discussion > NS Looking to Sell Delmarva & Delaware operations ??

My son is a NS conductor working yards in Newark, DE. He told me there is a potential sale or joint venture takeover of the existing Delmarva Secondary and other NS lines and yards in Delaware.

The potential buyer or new operator or co-operator is based in North Carolina.

At this point, he is not sure what is happening, and the crews are trying to get more info from both NS and the UTU.

Anyone else know of what is going on?

craigv Wrote:
-------------------------------------------------------
> At this point, he is not sure what is happening,
> and the crews are trying to get more info from
> both NS and the UTU.
>
> Anyone else know of what is going on?

I wouldn't count on the UTU for much help. They were the same ones who made comments about it being no big deal for CSX to spin off lines to regionals or shortlines.

>>>
My son is a NS conductor working yards in Newark, DE. He told me there is a potential sale or joint venture takeover of the existing Delmarva Secondary and other NS lines and yards in Delaware.

The potential buyer or new operator or co-operator is based in North Carolina.
>>>

No, it's not being sold. The speculated course of events to come in the next few months is that Norfolk Southern's Eastern Carolina Business Unit will be taking over the Delmarva operations, including Edgemoor Yard, Chrysler Yard (Newark), and all industry work the Delaware crews currently handle over Amtrak's Northeast Corridor. ECBU officials have hi-railed and visited the area increasingly over the last year or so, and by many accounts the axe is to drop rather soon.

For those that don't know, the ECBU is an entity that operates within Norfolk Southern, and is tailored to meet the needs of operations in areas with high costs and much local business that requires special attention. The management structure (including the marketing function) is designed to maximize on the efficiency of operations and serving customers; yes, a more shortline approach within a Class One railroad. It is ideal for the Delmarva area, as business is growing and growing, yet it is an area with high costs.

This would quite honestly be the best thing to ever happen to the Delmarva operations, and would be a large step to securing NS' long-term future in an area that has been on the Class One speculation list since the 1970s. If the speculated deal does go through, it will be interesting to see how the crew calling and dispatching functions from Harrisburg are affected, as well as the pools that are now run out of Harrisburg on the road and unit trains to Harrington, as well as the road trains to Newark (Port of Wilmington), and Edgemoor.


In closing, I'll let former NS CEO David Goode discuss the ECBU, as quoted from the Norfolk Southern May 2002 edition of Newsbreak:

"Dear Fellow Employee,
We recently announced the formation of Norfolk Southern's East Carolina Business Unit to run our lines in eastern North Carolina.

Why did we create it? The simple answer is we needed to try something different in an area that had flat revenues, high costs and faced costly reinvestment.

We could have disposed of the 485 miles of track in the East Carolina Business Unit, but retreating from that market would not help us get to our "7 + 7" goal - revenue of $7 billion or better and an operating ratio in the 70s. The right choice was to stand and fight."

Further information on the ECBU in that edition of Newsbreak is as follows:

"Norfolk Southern has created a marketing and operating unit in eastern North Carolina to develop new business, improve customer service and increase operating efficiency. The East Carolina Business Unit began operations April 1, with headquarters in Raleigh.

Reflecting the company's renewed focus on eastern North Carolina and its rail customers, the business unit has dedicated local management with complete responsibility for managing 485 miles of NS-operated railroad track east and south of Raleigh. It is designed to bring the railroad closer to its local customers to better meet their needs while improving the use of rail assets.

As an internal unit with its own budget, the East Carolina Business Unit is similar to a short line railroad but is linked to NS' centralized dispatching, customer service and operating systems. It has the flexibility and speed of a small railroad backed by the industrial development and technological resources of a major carrier."

The particular Newsbreak can be found in whole, here:

http://www.nscorp.com/nscorp/application?pageid=Legacy&page=http%3A//www.nscorp.com/nscorphtml/newsbreak/0502/index.html


CR

So, given NS wants to introduce the ECBU approach in Delaware, it sounds like ECBU has been determined by NS management to be a success in the Carolina's. Has customer traffic/satisfaction increased for the ECBU?

Maybe more employee speculation, but I was talking with the signal maintainer who handles Wilmington and the New Castle Secondary. He said NS was going to start (or at least was talking about) running all trains to Edgemoor via Newark/Bear/New Castle. He said that altho the one bridge over the Christina River had been rebuilt, the other one (down by the Shipyard Shops) is also in bad shape. They can avoid using it by utilizing the New Castle Secondary. It also gets them off another short section of the NEC.

I know we are supposed to remain positive, Union Brothers. However, Don't most *Internal* shortlines become *Actual* Shortlines at some point? I am thinking this approach was used several years back by CPR. I remember the short lived Canadian Atlantic Railway, which became a shortline (Windsor & Hantsport?) How about CN's attempt at an internal shortline on Newfoundland? Terra Transport was doomed as soon as the Highway was completed.
Now, some "internal shortlines" have succeeded, and been brought back in to the corporate fold. CPR's St. Lawrence & Hudson subsidiary is now just plain old CP again. And the Kawartha Lakes Railway is still soldiering on as an internal shortline.
I wonder if creating internal shortlines has more to do with acquiring shortline loans from the Government for repairs. The Delmarva does need some help, but traffic is there, if they want to go after it. After all, chickens gotta eat too!

DRLOCO--shout out to Graysonville, MD!!!

CAR did become a shortline/regional operation, but not the one you mention -- it became the Iron Road operation Canadian-American. The Windsor & Hantsport was previously CP's Dominion Atlantic.

I can not comment under NS but I did speak on several occassions to Conrail exec's who told me that the Delmarva Secondary was a very profitable line. I'm sure it still is. As for today, business is booming in Delaware from what I can see. Edgemoor Yard is booming and so is the Port of Wilmington. The only business that is down is the Crysler Plant in Newark, DE as obviously they are strapped with the boat anchor, Dodge Durango. I think that Delaware will remain an NS property. They just want to get their costs down and manage it differently. If the Christina River Bridge(Bridge 3) had not been rebuilt, I could see that. The rebuilding of that bridge was really a big boost to Edgemoor Yard and the Port of Wilmington.

Bruce

Picture is of a 36A approaching the Christina River Bridge 2 weeks ago. 2nd unit is an Ex CR C39-8. Then 2 GP15-1's. If you look at the GP15-1 I posted, The shops plated over part of the rear intake.

---

---

---

If Conrail had remained independent three years longer the entire Delmarva would be a shortline now. There were no shortage of potential investors. However, history has shown that NS is much less likely to sell off railroad to shortlines than CSX or other carriers.

I would not say business is booming but there has been growth particularly in aggregrates. The entire area north of the canal is a rather inefficient operation, largely due to lack of track space and having to deal with Amtrak. today, for instance. 12N arrived in Newport and set off about 20 autorack out of what must have been more than 60. Other days it only has six or eight and makes a quick move. Then they move down into the slums of Wilmington where it gets relieved. it's still there,

There is no urgency or plan to get the cars the final mile to Honda. Meanwhile, 36A sits at Newark, probably with no crew.
Both trains are supposed to be off the NEC by 0700 but it rarely happens.

brfriedm Wrote:

> If you look at the GP15-1
> I posted, The shops plated over part of the rear
> intake.

Could be the equivalent of a "winterization hatch." Probably just temporary to cut down the volume of cold air flowing through the radiators.

Thank you, CR3317, for the info about the ECBU. And others as well. I have copied what you wrote, and will email it to him. This will clear up the confusion.

I was sort of hoping he could keep his career with a Class 1, and NS in particular. The news seems encouraging.

Thanks

As someone who lives in Slower Lower, don't confuse NS's Delaware traffic with their Delmarva traffic. Above the canal, they have a lot of originating traffic from chemical plants, the Port of Wilmington, and the Chrysler plant. Almost all of the traffic going below the canal is coal (units to Indian River, industrial cuts to Seaford and Dover), chicken feed, and seasonal stone. The relatively small merchandise traffic is almost all terminating. Off-hand, the only originating traffic I can think of is handled either by Maryland & Delaware or Delaware Coast Line.
They are getting ready for their annual tie replacement as a work train has been dropping off ties for the past few weeks (at one point a -9 was lugging the half dozen cars). If the Indian River power plant ever closed, NS would unload the Delmarva Secondary asap.

I've been told by an NS engineer from Knoxville that train service employees
on NCBU are non-union. Anybody have more info?

wuzamudcat Wrote:
-------------------------------------------------------
> I've been told by an NS engineer from Knoxville
> that train service employees
> on NCBU are non-union. Anybody have more info?

NS is a closed shop. They can't retain ownership of the RR, and employ non-union T&E.