What the proxy fight at Norfolk Southern means for railroad safety

Just more than a year after a massive derailment of a Norfolk Southern freight train led to the release of tank cars full of toxic chemicals and increased attention to the issue of railroad safety, the control of the railroad is up for grabs at its annual meeting Thursday.

Just more than a year after a massive derailment of a Norfolk Southern freight train led to the release of tank cars full of toxic chemicals and increased attention to the issue of railroad safety, the control of the railroad is up for grabs at its annual meeting Thursday. The fight for control of the Atlanta-based railroad, one of America’s four major freight railroads, could determine more than just who runs the railroad in the future, but also whether it continues using longer and longer trains, a practice criticized by some rail safety advocates. A defeat of current Norfolk Southern management, credited with improving safety practices at the railroad since the February 3, 2023 derailment in East Palestine, Ohio, could make management at other railroads reluctant to take steps to improve safety if it means reduced profit margins. The fight has split the railroad’s unions, who disagree which management team – the current Norfolk Southern leadership or one proposed by activist investor Ancora Holdings – would be best for safety and the railroad’s employees. Ancora, which seeks to have its own slate of directors elected and a new CEO and COO put in charge of the railroad, insist current management has proven incapable of running a safe and profitable railroad. It wants to improve profitability at the railroad by greater emphasis on the operating philosphy known as Precision Scheduled Railroading, or PSR, which leads to longer trains making fewer stops at customers’ locations to pick-up or drop-off rail cars. PSR is generally opposed by both rail unions and many rail customers, and Norfolk management appeared to be taking steps away from PSR in the wake of the East Palestine derailment. Norfolk Southern CEO Alan Shaw and his management team received praised by some who, in the past, criticized the railroad’s performance, including Amit Bose, administrator of the Federal Railroad Administration, the nation’s rail regulator.