Cynthia M. "Cindy" Sanborn
Executive Vice President and Chief Operating Officer at Norfolk Southern
Thanks, Alan, and good morning, everyone. I'm going to talk to you all today about the outlook for our operations. During the past quarter, resource levels have challenged the fluidity of our operation, yet we have continued our momentum on increasing train size. We are in the very early days of seeing the fruits of our hiring initiatives and are working every avenue to improve service levels as quickly as possible. I'll provide an update on our Thoroughbred operating plan initiative, as well as what we're doing with technology to make the railroad safer and more productive. First, turning to slide six, is a recap of our operational activity metrics in the quarter, GTMs were down slightly, outperforming the unit volume decline as mix shifted modestly towards our heavier merchandise and coal segments. Our crew starts were down 5% in the quarter, which is a good news, bad news story. Resource levels prohibited us from operating some starts that we would have preferred to operate, and our recovery mechanism was challenged as a result. However, on the positive side of the ledger, we continue to drive very beneficial road train consolidations across our segments, most pronounced in our boat franchise as we move similar coal tonnage with 6% fewer train starts and saw train weight up across the board for intermodal, merchandise and bulk. In an effort to improve resiliency, we kept a portion of the surge locomotive fleet active, yet we still achieved another quarter of fuel efficiency improvement. Turning to network performance on slide seven, train speed and terminal dwell closely resembled the levels they were at in the fourth quarter. Qualified T&E levels continued to decline throughout the quarter, culminating in what we expect to be the trough in March. As we start to see relief in certain areas, we are prioritizing crew starts that can have the most impact on customer service levels, and we are redeploying our Go Teams when possible. I want to reiterate that improving service levels is our top priority. And turning to slide eight, I will provide more detail on where we are with our hiring efforts.
As we progress through 2021, we quickly identified the need to increase hiring within our transportation workforce. We were met with a very challenging labor market that made our ramp-up time longer than expected, but we responded with a robust plan to streamline our preemployment process, deploy a variety of financial incentives and mobilize additional onboarding resources. These efforts have paid off in a big way in 2022, and we now have over 800 conductor trainees on the property. As a result, we now expect our qualified T&E headcount to begin growing sequentially throughout the remainder of the year. We are laser-focused on utilizing these additional employees to improve service levels and provide a solid platform from which to launch TOP|SPG, which I will discuss on slide nine. As we did last quarter, I want to reiterate the approach of focusing on service, productivity and growth as equal pillars in our latest evolution of the TOP plan, which we envision launching in late second quarter. Let's talk about service quality and resiliency first. Several key elements of PSR are having a simple and executable operation as well as having a balance. You heard us talk about some of these PSR fundamentals when TOP21 was rolled out, and we now need to revisit a few of them with a renewed focus, while ensuring they are embedded in all of our segments, including intermodal. One of the greatest strengths of our network is the quality and positioning of our intermodal franchise. And as we've performed the zero-based review of how we link together our major markets, we found opportunities to simplify how we connect those terminals while providing more capacity than what we have today. This will include ensuring we have assets flowing across our network in a balanced fashion, so that less intervention is required for resources to be in the right place at the right time. Let me be clear, TOP|SPG is another lever we're pulling to improve our service and represents an evolution of our current operating plan.
This pathway towards enhanced service will allow us to better plan forward and execute longer trains. Additionally, going back to the idea of encompassing all business segments, while we've made great progress on enhancing book train sizes within coal, there is more runway ahead. Other facets of the bulk network such as grain, will see benefits as we develop the capability to run longer trains through those parts of the network, such as the Midwest. This productivity dividend is very complementary to the service pillar as it will give us more flexibility to handle commodity volatility. These improvements in train productivity have obvious benefits of reducing labor intensity but will also propel further fuel efficiency improvements. Finally, these efforts will ensure that we grow capacity within our terminals and along our main lines, including the initiatives I've discussed with you before, to bolster our infrastructure with targeted siding extensions that are actively coming online. We are going to provide the capacity our customers want to grow with us, organically while still creating the flexibility to respond quickly and effectively to new opportunities. Moving to our safety update on slide 10. We have seen improvement in both FRA train accidents per ton miles moved as well as the FRA injury index year-over-year. However, we will not be satisfied as long as there is a single injury or accident. Which is why we continue our efforts to get better in this area every day. First, on the engagement front. In 2021, we conducted our first annual safety survey, which was across the entire workforce. This has provided us with insight on what and where we need to focus our engagement efforts. We've expanded our field training program to leverage outlets such as online training, classroom training and our signature safety train events, so that we empower our workforce to actively engage in our goal of continuous improvement, when it comes to safety.
Lastly, we're making great progress building momentum with technology investments that are focused on safe and efficient operations, and I'll give a great example on slide 11 with an update where we are with one of our key technology pillars: automation. More specifically, we are using machine vision technology to detect component failures before they occur. We're in the process of deploying fully-automated inspection corridors, which will cover more than 90% of the cars moving across our network, using a variety of systems to detect signs and symptoms of pending failures before they occur. Equally as important as deploying the hardware, is developing the next-generation AI algorithms that detect these failures with edge computing and procedures for intervening quickly. This is where we've made really exciting progress, and we are already actively preventing incidents. We are finding that the technology is enabling us to achieve better outcomes than the human eyes alone can achieve. One reason for this is the power of seeing how these components are behaving on a train in motion versus while stationary during a manual inspection. We're generating high success rates with very few false positives and detecting components that need to be replaced but had no outward indication to the human eye. The close and effective working relationship between our data scientists and field team is creating a feedback loop that is accelerating our progress. This is one of the most revolutionary technologies we are working on, and I'm extremely excited for what we are achieving with our relentless pursuit of safety first and productivity. I will now turn the call over to Ed.
