Norfolk Southern Corporation (NSC): Business Model Canvas [Dec-2025 Updated]

You're digging into how a behemoth like Norfolk Southern Corporation actually prints money, and honestly, it's more intricate than just running trains. As an analyst who's seen a few cycles, I can tell you their FY2025 model, projecting near $12.38 billion in operating revenues, is all about monetizing that sprawling 19,200-route-mile network. Merchandise freight is the clear workhorse, accounting for 63% of the take, with Intermodal chipping in another 25%. This business runs on high fixed costs and strategic partnerships, so you'll want to see exactly how they structure their value and revenue streams to keep that engine humming. Dive into the full Business Model Canvas below to see the whole picture; it defintely lays out the strategy.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Norfolk Southern Corporation builds to run its network and grow volume. These aren't just vendors; they are essential links in the chain, especially as the industry faces massive consolidation.

Union Pacific (UP) for the Approved Transcontinental Merger

The biggest partnership development in late 2025 is the agreement with Union Pacific Corporation to create America's first coast-to-coast railroad. This transaction, announced on July 29, 2025, values Norfolk Southern Corporation at an enterprise value of $85 billion. Over 99% of both companies' shareholders approved the deal in November 2025. The combined entity is projected to operate over 50,000 route miles across 43 states, linking approximately 100 ports in North America. The stock and cash deal implies a value of $320 per share for Norfolk Southern Corporation shareholders. The companies are targeting closing the transaction by early 2027, with the formal application to the Surface Transportation Board (STB) expected around December 16, 2025. This move is intended to unlock an estimated $2.75 billion in annualized synergies.

Connecting Class I and Short-Line Railroads for Network Reach

Norfolk Southern Corporation relies heavily on its smaller partners for first- and last-mile service. The railroad connects directly with roughly 260 short lines, which effectively add over 20,000 additional miles of track to the network reach. About 40% of Norfolk Southern Corporation's carload volume originates or terminates on these connecting short lines. The Short Line Improvement Project, expanded to all connections, showed immediate results; the initial pilot with 40 short-line partners grew volume by 4.85% in 2024 over the general business growth in those same markets. More than 200 short-line representatives attended the 2025 annual conference to align on safety and growth.

Here's a look at the impact of the focused short-line program:

Florida East Coast Railway (FEC) to Enhance Productivity and Market Access

The partnership with Florida East Coast Railway (FEC) is crucial for accessing South Florida and Caribbean markets via the Florida Express service, which runs through a steel wheel interchange in Jacksonville. This service creates a two-way solution connecting South Florida and Charlotte, North Carolina. North Carolina is a major textile hub, leading the nation with nearly 20% of all US textile exports. FEC is the exclusive rail provider for key ports like Port Miami, Port Everglades, and Port of Palm Beach, making this connection vital for Norfolk Southern Corporation's East Coast intermodal strategy. This collaboration aims to provide fast, reliable service into those ports, as noted by FEC VP Intermodal Luis Hernandez.

Port Authorities and Terminal Operators for Intermodal Logistics

Norfolk Southern Corporation maintains partnerships with more than 50 inland, lake, sea, and river ports on the East Coast, leveraging its extensive intermodal network. The sector is seeing structural shifts; U.S. intermodal volume climbed by 5.1% year-over-year in the first half of 2025, the third-strongest start ever. For the week ending November 28, 2025, Norfolk Southern Corporation moved 68,399 UNITS of intermodal volume. In 2024, the railroad handled 4.1 million intermodal units, which represented 25% of its total railway operating revenues. The Q3 2025 operating ratio was 64.6%, or 63.3% when adjusted for certain charges, showing the efficiency of these high-volume movements.

Technology Vendors for AI and Machine Vision Safety Systems

Safety is cemented through partnerships with technology developers, most notably the Georgia Tech Research Institution (GTRI). This collaboration powers the Digital Train Inspection (DTI) portals, which have been recognized with an honorable mention in Fast Company's 2025 Innovation by Design Awards. The portals use machine vision technology, capturing about 1,000 ultra-high-resolution, 360-degree images of each passing railcar at speeds up to 70 mph. The system is supported by 38 advanced Deep Learning algorithms developed in-house by Norfolk Southern Corporation's Data Science/AI team and deployed across heavily trafficked lanes. These systems use 24-megapixel trackside cameras and stadium lighting to transform inspections, moving from reactive to proactive defect identification.

Key technology partnership metrics include:

• GTRI partnership for hardware engineering of DTI portals.
• 38 advanced Deep Learning algorithms deployed.
• Portals capture approx. 1,000 images per rail car.
• Inspection speed up to 70 mph.
• DTI portals recognized by Fast Company in 2025.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Key Activities

You're looking at the core engine of Norfolk Southern Corporation, the daily actions that keep freight moving across the Eastern United States. Honestly, it's all about disciplined execution on a massive scale.

Operating and maintaining the 19,200 route mile rail network is the foundation. That network spans 22 eastern states and Washington, D.C., connecting your business to major marketplaces. While the company operates these route miles, the total track infrastructure maintained is even larger, with Norfolk Southern maintaining 28,300 miles of track across its system, with the remainder managed via trackage rights. This physical asset base is what allows Norfolk Southern Corporation to serve more than half the U.S. population and manufacturing base.

The efficiency drive is centered on executing Precision Scheduled Railroading (PSR) 2.0 for efficiency. While the initial TOP21 PSR plan started back in 2019, the focus remains on operational discipline to drive down costs and improve service predictability. For instance, in the first quarter of 2025, Norfolk Southern Corporation achieved an operating ratio of 61.7%. The company has projected an aim to improve its adjusted operating ratio by 100-150 basis points over 2024 levels for the full year 2025.

This operational focus is heavily supported by strategic capital investment in infrastructure. You saw the plan for 2025, which includes a significant capital expenditure plan of $2.2 billion. That follows a major push in the prior year, where Norfolk Southern Corporation completed infrastructure upgrades worth $1 billion throughout its 22-state network in 2024. These investments target tangible improvements across the system.

Here's a quick look at how those investments and operational disciplines are translating into measurable results as of late 2025:

Managing complex logistics and supply chain coordination is inherent in moving everything from coal and chemicals to automotive parts and intermodal containers. The company is focused on enhancing supply chain reliability, which is why you see them investing in technology to improve flow. For example, Norfolk Southern Corporation is working to improve train velocity and reduce terminal dwell times.

Finally, the commitment to continuous safety and service reliability improvements is evident in the reported metrics. Safety is a core value, and the results show action. For the year-to-date period leading up to the late 2025 reports, personal injury and train accident rates improved by 8% and 28%, respectively, compared to full-year 2024. This builds on the 40% reduction in the FRA reportable mainline train accident rate achieved in 2024. The service side is seeing gains too:

• Car miles per day up 8% compared to the same quarter last year.
• Fuel efficiency set an all-time record, improving 5% year over year.
• Three-year productivity target (2024-2026) increased to a cumulative goal of $600 million.
• Over $2.2M+ provided in support to first responder organizations via the Safety First Grant program.

They're definitely using technology to drive these results, deploying new acoustic bearing detectors and Digital Train Inspection Portals.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Key Resources

You're looking at the core assets Norfolk Southern Corporation (NSC) uses to run its massive Eastern U.S. freight operation. These aren't just line items on a balance sheet; they're the physical and intellectual capital that moves the economy. Let's break down the hard numbers behind their key resources as of late 2025.

Extensive Rail Network Spanning 22 States in the Eastern U.S.

The sheer scale of the physical network is the foundation. Norfolk Southern Corporation operates across 22 states in the Eastern U.S.. This network includes approximately 19,200 route miles of track, connecting a vast number of customers. To keep this system fluid, the company made significant infrastructure investments, completing $1 billion in systemwide upgrades throughout 2024 alone. These improvements included replacing 558 track miles of rail and installing 2.1 million cross ties in 2024.

The network connects a huge customer base:

• Connecting 800 industrial sites.
• Serving 175 warehouses.
• Providing access to 43 ports.

The company is defintely focused on maintaining and expanding this footprint, evidenced by 2025 capital investment plans.

Fleet of Locomotives and Diverse Rolling Stock (Carloads)

The rolling stock-locomotives and freight cars-is what actually generates revenue. While the exact current fleet size isn't public, we see operational metrics that tell the story of utilization. As of early 2025, Norfolk Southern Corporation was focused on optimizing asset use by storing 500 locomotives. The company's 2024 performance saw them deliver approximately 7 million carloads annually.

Here's a snapshot of recent operational activity, using the weekly data from the week ending November 28, 2025, which gives you a real-time feel for the asset utilization:

The intermodal segment, a key growth area, moved 4.1 million units in 2024.

Real Estate Holdings and Intermodal Terminal Facilities

Norfolk Southern Corporation's real estate is a strategic asset, used both to support operations and for capital generation. In 2024, the company made targeted acquisitions, committing $45.6 million to acquire 523.7 acres of land across 14 states. Simultaneously, they strategically sold 377 acres of property, reinvesting those funds into rail-integrated solutions. This activity supports a massive pipeline of future business; as of early 2025, the active pipeline of customer investments along the network was valued at $9 billion.

The intermodal terminals are crucial for high-growth traffic. The company continues to expand and dedicate facilities, with news in 2025 mentioning new terminal openings in North Carolina and dedications in Pennsylvania as part of the ongoing strategy.

Crescent Corridor, a Key 1,400-Mile Intermodal Route

The Crescent Corridor is a major strategic asset, spanning about 1,400 miles (or 2,300 km) from the Northeast to the Southeast regions. This route is designed to handle fast freight, with projections aiming to remove 1.3 million long-haul trucks annually from interstates. For context on the passenger rail component that shares trackage, Norfolk Southern controls 1,140 miles of the 1,377-mile Amtrak Crescent Route segment. The company has been actively opening and upgrading terminals along this corridor, including facilities in Alabama, Tennessee, and Pennsylvania as of 2025 coverage.

Skilled Workforce and Proprietary Operational Technology

The people and the tech they use are the intangible resources that drive efficiency. Norfolk Southern Corporation has a dedicated team of about 20,000 conductors, engineers, and other employees. Their 2025 productivity target is set at approximately $200 million in annual cost savings, up from an earlier target of $175 million. This efficiency drive is heavily reliant on technology.

Key technology investments and operational focus areas include:

• Plans to invest $2.2 billion in infrastructure and technology in 2025.
• Focus on proprietary tech like AI, machine vision, and edge computing to advance safety and efficiency.
• Infrastructure upgrades in 2024 included 5 Digital Train Inspection portals constructed and in service.
• Upgrades to Communications and Signals, such as 869 CTC to ITCMS cut-ins completed in 2024.

The company's operational focus, sometimes referred to as PSR (Precision Scheduled Railroading) 2.0, includes goals like a 20% reduction in overtime and decreased terminal dwell times.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Value Propositions

You're looking at the core promises Norfolk Southern Corporation (NSC) makes to its customers and the market as of late 2025. These aren't just mission statements; they are backed by operational results and concrete targets. Honestly, the value proposition centers on being the safe, efficient, and greener alternative for heavy freight in the Eastern U.S.

Safe, reliable, and resilient freight transportation service

Safety is a core value, and the numbers show real traction. We're talking about significant reductions in accident rates, which speaks directly to reliability. You can see the operational improvements reflected in the operating ratio, which is a key measure of efficiency-lower is better, defintely.

• FRA-reportable mainline train accident rate reduction: 35%.
• Overall train accident rate reduction: 25%.
• Adjusted Operating Ratio (Q2 2025): 63.4%, a 170 basis point improvement from Q2 2024.
• Adjusted Operating Ratio (Q3 2025): 63.3%, a 10 basis point improvement from Q3 2024.

Cost-effective bulk and long-haul shipping over trucking

When you compare rail to trucking for long-haul, the cost stability is a major selling point. While trucking costs can spike and quickly hit consumer prices, rail cost changes are smaller and slower. Here's the quick math on inflation impact, according to Association of American Railroads analysis:

This resilience helps shippers manage their overall supply chain costs better, especially for bulk and intermediate goods.

Sustainable logistics, helping customers avoid 15 million tons of yearly carbon emissions

Norfolk Southern Corporation is actively positioning itself as the lower-carbon choice. They help customers avoid approximately 15 million tons of yearly carbon emissions just by choosing rail over other modes. Plus, they are making internal progress toward their Climate Transition Plan goals.

• Customer CO2 Avoidance: Approximately 15 million tons of yearly carbon emissions avoided.
• Internal Emissions Reduction: Emissions cut by 16% since 2019.
• 2034 Target: Working toward a 42% reduction in Scope 1 and 2 emissions by 2034.
• Fuel Efficiency: Achieved a 3% improvement in fuel efficiency Year-over-Year in 2025.
• Rail vs. Truck Emissions: Shipping via rail saves 70%-90% in emissions compared to truck.

Comprehensive intermodal network in the Eastern U.S.

The network footprint is massive, covering the core of the Eastern U.S. manufacturing and population base. They operate the largest intermodal rail system in eastern North America, connecting to every major container port on the Atlantic coast and major ports in the Gulf of Mexico and Great Lakes.

Look at the scale of their intermodal operations from 2024:

Reduced transit times and improved supply chain fluidity

Fluidity is about speed and predictability, which Norfolk Southern Corporation is driving through focused investment and operational changes. They completed $1 billion in systemwide infrastructure upgrades in 2024 to support this. The focus on operational execution is showing up in key performance indicators.

• Intermodal Train Speed: Increased by 3.1% in Q4 2024.
• Productivity Target: Raised for 2025 to approximately $200 million from an initial ~$175 million.

Finance: draft 13-week cash view by Friday.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Customer Relationships

You're looking at how Norfolk Southern Corporation (NSC) manages its relationships with shippers, which is key since they move goods for over half of the U.S. population and manufacturing base.

Dedicated direct sales force for key industrial clients

Norfolk Southern Corporation deploys its Commercial team directly to key sectors like automotive, coal, intermodal, and agriculture. This direct engagement supports the company's industrial development pipeline. In 2024, customers advanced 149 industrial development projects along the network, representing an investment of more than USD 4.3 billion in new or expanded facilities. Of those, 65 projects became operational, bringing in USD 1.2 billion in investment and creating 1,700 jobs. The active pipeline identified by customers is projected to generate more than 150,000 incremental carloads and an additional USD 9 billion in customer investments over the coming years.

Long-term, contractual relationships with major shippers

The foundation of many relationships is built on formal agreements and network access. Norfolk Southern Corporation operates across 22 states, connecting to every major container port on the East Coast, plus ports on the Gulf of Mexico and Great Lakes. The company helps its customers avoid approximately 15 million tons of yearly carbon emissions by choosing rail. The formal nature of these ties is evidenced by the Surface Transportation Board receiving numerous Contract Summaries from Norfolk Southern Corporation, such as contract amendments like NS-C-1663M and NS-C-1935C, filed as recently as April 30, 2025. Furthermore, securing labor peace is critical to maintaining service promises; as of November 11, 2025, Norfolk Southern Corporation reached a five-year collective bargaining agreement with the Brotherhood of Railroad Signalmen, which covers nearly 970 members and includes an 18.8-percent compounded wage increase over five years, bringing the total ratified union agreements to 12 out of 13.

Data-driven service personalization and logistics support

Norfolk Southern Corporation uses customer feedback to guide service improvements, which is a core part of its customer-centric strategy. The 2025 annual customer survey showed significant engagement and sentiment shifts.

The company's dedicated team members deliver approximately 7 million carloads annually, and in the second quarter of 2025, Norfolk Southern Corporation reported revenue of USD 3.1 billion and diluted earnings per share of USD 3.41.

Customer-centric strategy focused on service and productivity

The long-term strategy emphasizes making service an enduring competitive advantage. This focus on operational excellence directly impacts customer confidence in long-term supply plans. The company's operating ratio for the second quarter of 2025 was 62.2%, an improvement from the 62.8% reported in the second quarter of 2024.

Digital tools for real-time tracking and business solutions

Technology investment directly supports customer visibility and operational efficiency. Norfolk Southern Corporation has invested $1B in infrastructure improvements to optimize service as of early 2025. The company is layering advanced Artificial Intelligence (AI) atop data from more than 300 real-time diagnostic sensors on a typical locomotive. They now have hundreds of AI-powered solutions in production. Furthermore, the company uses digital portals, having installed five new Digital Train Inspection Portals across the network. For logistics solutions, Norfolk Southern Corporation has expanded its reach through partnerships with more than 50 inland, lake, sea, and river ports, and works with over 260 short line connections, scaling a program that increased volume by 4.85% at 40 pilot interchanges in 2024.

Finance: draft 13-week cash view by Friday.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Channels

You're looking at how Norfolk Southern Corporation moves freight-the physical and digital pathways they use to connect with customers and deliver service. It's a massive physical footprint supported by increasingly digital tools. Here's the breakdown of those channels based on the latest figures.

The core of the channel strategy remains the physical network. As of December 31, 2024, Norfolk Southern Corporation operated approximately 19,200 route miles across 22 states and the District of Columbia. This infrastructure represents a net property value of about $36 billion on a historical cost basis, which is the foundation for all service delivery.

The movement of goods relies heavily on their terminals and yards. Norfolk Southern Corporation boasts what they call the most extensive intermodal network in the eastern half of the U.S.. The performance of this channel is critical; for the week ending November 28, 2025, the company moved 68,399 intermodal units. To give you context on scale, the 4.1 million intermodal units handled in 2024 accounted for 25% of their total railway operating revenues. The company projected intermodal freight growth of 3.1% in Q2 2025, showing its continued importance as a channel for e-commerce demand.

Here's a look at the key operational metrics that define the scale of these physical channels as of late 2025:

The direct sales and account management channel is regionally focused to support this network. Norfolk Southern Corporation Field Sales Managers are regionally based to better assist both Short Lines and their customers with shipping needs. While I don't have an exact headcount for the sales team, their interaction is vital, especially concerning the 260-plus short line partners.

Digital platforms are increasingly becoming the primary customer interface, aiming for a low-touch experience. The next-generation AccessNS portal is the one-stop digital platform for conducting business. This platform allows customers to track shipments via interactive maps, get real-time data, request pricing, and manage exceptions. Furthermore, mobile applications extend this reach:

• NS Trax: Manages shipping and logistics needs on the go, extending AccessNS functionality.
• NS Rating: Allows shippers to perform rate inquiries and view historical searches efficiently.
• ExpressNS+: Specifically for intermodal drivers at facilities, streamlining ingate, outgate, and on-terminal procedures to reduce wait times.

Strategic interchange points are crucial for extending reach without massive capital outlay. Norfolk Southern Corporation connects with roughly 260 short lines, which adds over 20,000 additional miles of track to their network. This collaboration is formalized through programs like the Short Line Interchange Project. For example, the initial 40 participating interchanges saw volume growth of 4.85% through 2024, significantly outpacing the general merchandise business growth of 1% that same year. About 40% of Norfolk Southern Corporation's carload volume originates or terminates on one of these short line partners. They also engage in joint ventures, such as the Meridian Speedway with KCS, which provides a short, fast route to the Southwest to capture more intermodal traffic. If onboarding takes 14+ days, churn risk rises, so the digital and short line data channels need to be seamless.

Finance: draft 13-week cash view by Friday.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Customer Segments

Norfolk Southern Corporation serves a diverse base of shippers across the eastern United States, categorized primarily by the type of freight moved over its over 19,000 route miles network. The company delivers approximately 7 million carloads annually to its customers.

The estimated revenue contribution for the full fiscal year 2025 highlights the relative importance of these broad customer groups, with the Merchandise segment being the largest driver.

The total estimated revenue for Norfolk Southern Corporation in FY2025 is $12 Bil.

Industrial manufacturers (chemicals, metals, construction)

These shippers fall under the Merchandise Freight segment, which is expected to generate $7.7 Bil in revenue for FY2025, representing 63% of the total. In the second quarter of 2025, merchandise revenues increased 4%, with merchandise units rising 4%. For the third quarter of 2025, this segment was the primary growth driver, with revenue increasing 6% year-over-year to $1.969 billion, supported by a 6% volume increase.

Key products shipped within this group include:

• Chemicals, with units up 7% in Q2 2025.
• Metals and construction commodities.
• Paper and clay products.

Automotive companies (parts and finished vehicles)

Automotive products are included within the Merchandise Freight category. In the second quarter of 2025, automotive units saw a 7% increase, contributing to the segment's overall growth.

Agricultural and forest product shippers

These shippers are also part of the Merchandise Freight segment. Second quarter 2025 merchandise revenue growth was driven by higher volumes in agriculture and forest products. Norfolk Southern helps its customers avoid approximately 15 million tons of yearly carbon emissions by shipping via rail, a benefit particularly relevant to high-volume shippers like agricultural companies.

Coal and energy producers

This group contributes to the Coal Freight segment, projected at $1.5 Bil in revenue for FY2025, or 12% of the total. Despite this revenue projection, the segment faced headwinds; coal revenue declined 1% in Q2 2025 and 12% in Q3 2025. Still, coal tonnage showed strength in Q2 2025, with total coal units increasing 12% and utility coal tonnage up 23%.

Ocean carriers and intermodal logistics providers

This segment corresponds to Intermodal Freight, estimated to generate $3.1 Bil in FY2025, making up 25% of total revenue. Intermodal revenues remained flat in Q2 2025 despite a 1% volume increase, but declined 1% in Q3 2025. Norfolk Southern operates the most extensive intermodal network in the eastern U.S., connecting to every major container port on the Atlantic coast and major Gulf of Mexico ports. International volumes for intermodal rose 5% in the first six months of 2025.

You should review the Q4 2025 guidance to see if the intermodal segment recovers from the Q3 softness. Finance: draft 13-week cash view by Friday.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Cost Structure

You're looking at the engine room of Norfolk Southern Corporation (NSC), where the money goes out to keep the rails running. For a Class I railroad, the cost structure is dominated by things you can't easily turn off, so understanding these fixed and semi-fixed expenses is key to assessing profitability.

High fixed costs for maintaining the 19,200 mile network represent a massive, ongoing drain. While I don't have the precise 2025 fixed cost breakdown, the sheer scale of the physical plant dictates this. Think about the annual maintenance required across that vast footprint-track, bridges, signals-it's substantial before a single car moves.

Significant operating expenses (labor, fuel, materials) are the day-to-day variable costs. Looking at the full-year 2024 results, total railway operating expenses were $8,052 million, a noticeable drop from $9,305 million in 2023, largely helped by lower fuel prices and incident-related charges easing off their 2023 peak. Here's how the major components stacked up for the fiscal year ending December 31, 2024, compared to 2023 (amounts in millions):

You can see fuel expense fell by 15% in 2024, driven by lower locomotive fuel prices, which helped offset other inflationary pressures. Also, note the Materials and other category was significantly lower in 2024, partly due to gains from railway line sales, which totaled $433 million in 2024, effectively reducing the net expense number.

Capital expenditures for infrastructure remain a non-negotiable outlay for network health. Norfolk Southern Corporation has planned capital expenditure of around $2.20 billion in 2025. This investment funds the physical upkeep and modernization necessary to run a safe and efficient railroad, like the $1 billion in systemwide infrastructure upgrades they completed in 2024.

Costs related to safety and incident remediation are a major, unpredictable cost center. The total bill for the Eastern Ohio derailment has reached $2.2 billion as of early 2025. For context, Norfolk Southern recognized $325 million in related expenses in 2024, down significantly from the $1.1 billion recognized in 2023. Furthermore, a consent decree with the U.S. government is estimated to require $244 million in safety initiatives spending through 2025, and the EPA estimates $235 million for all past and future cleanup costs under that decree.

Labor costs for the large, unionized workforce are rising due to recent contract negotiations. You've got to factor in the impact of these new agreements. Several tentative five-year agreements reached in 2024 proposed an average wage increase of 3.5 percent per year for about 55% of the unionized workforce. More recently, a ratified deal with the Brotherhood of Railroad Signalmen in November 2025 delivers an even steeper 18.8% compounded wage increase over five years for nearly 970 signal employees. This means 12 of 13 unions now have agreements, securing labor peace but locking in higher compensation expense for the next half-decade. The 2024 compensation and benefits expense was $2,823 million, nearly flat year-over-year, but expect that to climb as these new contracts take full effect.

You should track the operating ratio closely; Norfolk Southern Corporation reported a railway operating ratio of 66.4% in 2024, an improvement from 76.5% in 2023, showing that despite the incident costs, operational discipline improved.

Finance: draft the projected 2026 Compensation & Benefits expense based on the new contract escalators by next Tuesday.

Norfolk Southern Corporation (NSC) - Canvas Business Model: Revenue Streams

You're looking at the core money-makers for Norfolk Southern Corporation (NSC) as we head into late 2025. The business model is fundamentally about moving goods across the eastern United States, and the revenue is heavily concentrated in three main freight categories. Honestly, the Merchandise segment does the heavy lifting.

For the full fiscal year 2025, the total railway operating revenues for Norfolk Southern Corporation are projected to be near $12.38 billion. This top line is built upon the performance of its core rail services, which are detailed below, along with some smaller, but still important, supplementary income sources.

The breakdown of the projected 2025 railway operating revenues shows a clear hierarchy of importance:

• Merchandise Freight revenue, projected at $7.7 billion, representing 63% of the total FY2025 revenue.
• Intermodal Freight revenue, projected at $3.1 billion, which accounts for 25% of the total FY2025 revenue.
• Coal Freight revenue, projected at $1.5 billion, making up 12% of the total FY2025 revenue.

To give you a sense of the recent run rate, the actual reported revenues for the first half of 2025 totaled $6.103 billion, up 1% from the prior year period. Specifically, the first quarter of 2025 saw total revenue of $3.0 billion, and the second quarter of 2025 revenue increased to $3.11 billion.

Here's a table summarizing the projected 2025 revenue streams based on the expected freight mix. Note that the sum of the three freight segments is $12.3 billion, which is very close to the required total revenue projection.

Beyond the core rail operations, Norfolk Southern Corporation also generates ancillary revenues. These are the smaller, but still necessary, income sources that support the overall financial picture. What this estimate hides is the exact split of these smaller items, but we can derive the total ancillary amount based on the required figures.

The ancillary revenues from real estate, demurrage, and other services are the difference between the required total operating revenue and the sum of the primary freight segments. Based on the figures provided, this implies an ancillary revenue stream of approximately $80 million (calculated as $12.38 billion total minus $12.3 billion in freight revenue).

These ancillary sources include:

• Income from real estate activities.
• Fees collected for demurrage (delaying railcars beyond free time).
• Other miscellaneous service revenues.

For context on the TTM (Trailing Twelve Months) performance ending September 30, 2025, Norfolk Southern Corporation's total revenue was reported at $12.23 billion. Finance: draft 13-week cash view by Friday.