United States (U.S.). We also transport overseas freight through several Atlantic and Gulf Coast ports. We offer

the most extensive intermodal network in the eastern half of the U.S.

 

We make available free of charge through our website, www.norfolksouthern.com, our annual report on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as

reasonably practicable after such material is electronically filed with or furnished to the U.S. Securities and

Exchange Commission (SEC). In addition, the following documents are available on our website and in print to any

shareholder who requests them:

    • Norfolk Southern Corporation Bylaws

    • Charters of the Committees of the Board of Directors

    • Corporate Governance Guidelines

    • Categorical Independence Standards

    • The Thoroughbred Code of Ethics

    • Code of Ethical Conduct for Senior Financial Officers

 

 

 

 

                                                         K3

RAILROAD OPERATIONS – At December 31, 2023, we operated approximately 19,100 route miles in 22 states

and the District of Columbia.

 

Our system reaches many manufacturing plants, electric generating facilities, mines, distribution centers, transload

facilities, and other businesses located in our service area.

 

 

 

 

Corridors with heaviest freight volume:

       • New York City area to Chicago (via Allentown and Pittsburgh)

       • Chicago to Macon (via Cincinnati, Chattanooga, and Atlanta)

       • Central Ohio to Norfolk (via Columbus and Roanoke)

       • Cleveland to Kansas City

       • Birmingham to Meridian

       • Memphis to Chattanooga

 

 

 

 

                                                         K4

The miles operated, which include major leased lines between Cincinnati and Chattanooga, and an exclusive

operating agreement for trackage rights over property owned by North Carolina Railroad Company, were as

follows:

 

                                                                  Mileage Operated at December 31, 2023

                                                                     Second      Passing

                                                                       and       Track,

                                                                      Other    Crossovers Way and

                                                       Route          Main         and        Yard

                                                       Miles          Track     Turnouts Switching               Total

 

Owned                                                    14,312          2,676          1,953           8,142     27,083

Operated under lease, contract or trackage

  rights                                                  4,825          1,889            406            841       7,961

 

   Total                                                 19,137          4,565          2,359           8,983     35,044

 

In 2022, we entered into an asset purchase and sale agreement with the Board of Trustees of the Cincinnati Southern

Railway (CSR) to purchase 337 miles of railway line that extends from Cincinnati, Ohio to Chattanooga, Tennessee

that we currently operate under a lease. The transaction is scheduled to close on March 15, 2024. See further

discussion in Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” and

Item 8 “Notes to Consolidated Financial Statements.”

 

We operate freight service over lines with significant ongoing Amtrak and commuter passenger operations and

conduct freight operations over trackage owned or leased by Amtrak, New Jersey Transit, Southeastern

Pennsylvania Transportation Authority, Metro-North Commuter Railroad Company, and Michigan Department of

Transportation.

 

The following table sets forth certain statistics relating to our operations for the past five years:

 

                                                                          Years ended December 31,

                                                             2023         2022      2021     2020                2019

 

Revenue ton miles (billions)                            176                 179          178          164           194

Revenue per thousand revenue ton miles              $ 69.05             $ 71.35      $ 62.56      $ 59.67       $ 58.21

Revenue ton miles (thousands) per railroad employee   8,719               9,513        9,694        8,191         7,939

Ratio of railway operating expenses to railway

  operating revenues (railway operating ratio)        76.5%               62.3%        60.1%        69.3%        64.7%

 

RAILWAY OPERATING REVENUES – Total railway operating revenues were $12.2 billion in 2023.

Following is an overview of our three commodity groups. See the discussion of merchandise revenues by major

commodity group, intermodal revenues, and coal revenues and tonnage in Item 7 “Management’s Discussion and

Analysis of Financial Condition and Results of Operations.”

 

MERCHANDISE – Our merchandise commodity group is composed of four groupings:

  • Agriculture, forest and consumer products includes soybeans, wheat, corn, fertilizer, livestock and poultry

    feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper

    products, wood fibers, wood pulp, beverages, and canned goods.

  • Chemicals includes sulfur and related chemicals, petroleum products (including crude oil), chlorine and

    bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, sand, and natural gas liquids.

 

 

 

                                                            K5

    •   Metals and construction includes steel, aluminum products, machinery, scrap metals, cement, aggregates,

        minerals, clay, transportation equipment, and items for the U.S. military.

    •   Automotive includes finished motor vehicles and automotive parts.

 

In 2023, we handled 2.2 million merchandise carloads, which accounted for 61% of our total railway operating

revenues.

 

INTERMODAL – Our intermodal commodity group consists of shipments moving in domestic and international

containers and trailers. These shipments are handled on behalf of intermodal marketing companies, international

steamship lines, premium customers and asset-owning companies. In 2023, we handled 3.8 million intermodal

units, which accounted for 25% of our total railway operating revenues.

 

COAL – Coal revenues accounted for 14% of our total railway operating revenues in 2023. We handled 76 million

tons, or 0.7 million carloads, most of which originated on our lines from major eastern coal basins, with the balance

from major western coal basins received via the Memphis and Chicago gateways. Our coal franchise supports the

electric generation market, directly serving approximately 30 coal-fired power plants, as well as the export,

domestic metallurgical and industrial markets, primarily through direct rail and river, lake, and coastal facilities,

including various terminals on the Ohio River, at Lamberts Point in Norfolk, Virginia, at the Port of Baltimore, and

on Lake Erie.

 

FREIGHT RATES – Our predominant pricing mechanisms, private contracts and exempt price quotes, are not

subject to regulation. In general, market forces are the primary determinant of rail service prices.

 

RAILWAY PROPERTY

 

Our railroad infrastructure makes us capital intensive with net properties of approximately $33 billion on a historical

cost basis.

 

Property Additions – Property additions for the past five years were as follows:

 

                                                            2023       2022         2021         2020         2019

                                                                               ($ in millions)

 

Road and other property                                 $    1,547 $     1,345 $      1,041 $      1,046 $     1,371

Equipment                                                      802         603          429          448         648

 

   Total                                                $    2,349 $     1,948 $      1,470 $      1,494 $     2,019

 

Our capital spending and replacement programs are and have been designed to support our ability to provide safe,

efficient, and reliable rail transportation services.

 

 

 

 

                                                            K6

Equipment – Our equipment includes owned and leased locomotives and railcars; maintenance of way equipment

and machinery; other equipment and tools used in our shops, offices and facilities; and vehicles and other equipment

used for maintenance, transportation, and other activities. Our equipment includes both owned equipment acquired

by us, and equipment held under lease arrangements. At December 31, 2023, we owned or leased the following

revenue generating equipment:

                                                                                                     Capacity of

                                                         Owned          Leased          Total        Equipment

 Locomotives:                                                                                        (Horsepower)

  Multiple purpose                                            3,162            30           3,192      12,471,795

  Auxiliary units                                               140            —              140              —

  Switching                                                       4            —                4           4,400

 

   Total locomotives                                          3,306            30           3,336      12,476,195

 

 Freight cars:                                                                                            (Tons)

  Gondola                                                    18,011         3,741         21,752           2,443,624

  Hopper                                                      7,672            —           7,672             876,433

  Covered hopper                                              5,384            —           5,384             598,451

  Box                                                         2,189           610          2,799             257,694

  Flat                                                        1,213           676          1,889             135,106

  Other                                                       1,086            —           1,086              46,815

 

   Total freight cars                                        35,555         5,027         40,582          4,358,123

 

 Intermodal equipment:

  Chassis                                                    38,397         1,063         39,460

  Containers                                                 17,662            —          17,662

  Roadrailers                                                 1,110            —           1,110

 

   Total intermodal equipment                                57,169         1,063         58,232

 

The following table indicates the number and year built for locomotives and freight cars owned at December 31,

2023:

                                                                            2014-     2009- 2008 &

                           2023      2022     2021       2020     2019      2018       2013    Before    Total

 Locomotives:

 No. of units                   —        —         1          10      36       225        242     2,792     3,306

 % of fleet                  —%       —%       —%          —%        1%        7%         7%       85%     100%

 

 Freight cars:

 No. of units               1,043       236      —         —          198    4,195     6,401     23,482      35,555

 % of fleet                   3%        1%      —%        —%          —%      12%       18%        66%        100%

 

 

 

 

                                                        K7

The following table shows the average age of our owned locomotive and freight car fleets at December 31, 2023

and information regarding 2023 retirements:

                                                                                Locomotives         Freight Cars

 Average age – in service                                                           28.5 years           25.4 years

 Retirements                                                                           2 units         1,744 units

 Average age – retired                                                              23.0 years           40.8 years

 

Track Maintenance – Of the 35,000 total miles of track on which we operate, we are responsible for maintaining

28,400 miles, with the remainder being operated under trackage rights from other parties responsible for

maintenance.

 

Over 85% of the main line trackage (including first, second, third, and branch main tracks, all excluding rail

operated pursuant to trackage rights) has rail ranging from 131 to 155 pounds per yard with the standard installation

currently at 136 pounds per yard. Approximately 39% of our lines, excluding rail operated pursuant to trackage

rights, carried 20 million or more gross tons per track mile during 2023.