Hurricane Survival Mode: We now have operating data for the week of Sept. 28 through Oct. 4. It encapsulates most of the damage from Hurricane Helene, which made landfall in Florida late on Thursday, Sept. 26, before making a beeline for North Carolina, where it did the most damage in the area around Asheville.
While Hurricane Debby in early August presented its own challenges, the operating data makes it clear Helene was orders of magnitude worse. Compared to the week prior, which itself incorporates one day of Helene’s impact, Norfolk Southern’s average train speed dropped by 8% to a year-to-date low and, within this, intermodal velocity fell to a level we haven’t seen since the arctic blast in the third week of December 2022 (exacerbated by the three day ILA strike).
In the past few years, only the 1-2 punch from hurricanes Florence and Michael in 2018 pushed velocity to a lower absolute level, but Helene dropped it further and faster off a higher base. Terminal dwell also increased by 11% to a six-month high.
With regard to CSX, the railroad somehow held the line in terms of average train speed, with just a downtick, but terminal dwell took a big hit, up 19% from the week prior, including a 25% jump in average dwell at CSXs five hump yards. Excluding the seasonal dwell spikes between Christmas and New Year, we have to go back to the 2022 Service Crisis to find higher dwell numbers.
What Should We Have Expected from Hurricane Milton?
We didn’t expect Hurricane Milton to have anywhere near the impact that Helene did, primarily because it simply inundated with rain a much smaller area of the two eastern Class I networks. Additionally, Norfolk Southern doesn’t have much infrastructure in Florida, with only a couple of lines near the border with Georgia. In terms of which one to worry about, Florida is primarily CSX territory.
Compounding Risk; This is What Resiliency is Supposed to Protect You From
As we’ve written in the past, it’s not the one big unexpected event that kills asset turns on a rail network It’s usually the compounding effect of two or three back-to-back. With Milton, the two eastern railroads have now been hit with three major hurricanes in 65 days, including a historically nasty one in the middle (Helene). In the old days, before the 2022 Service Crisis, we’d be extremely worried right now that a combination of too-lean crew capacity and big hits to velocity and dwell might tip one or both of these networks into a meltdown state. However, our working assumption is that both Norfolk Southern and CSX have learned the lessons from 2022 and have since enhanced the resiliency of their networks—primarily around crews—as the STB asked them to do during the April 2022 service hearing. That means a V-shaped rebound once the effects from Hurricane Milton wear off, rather than a spiral into operational oblivion (meltdown). In a sense, this hurricane triple shot is the first serious meltdown stress test we’ve seen since 2022. Let’s see how they do …
