John F. Orr
Chief Operating Officer at Norfolk Southern
Thank you, Alan. It's a pleasure to provide an update on our progress. Turning to slide five. At NS, safety enables performance and our commitment to safety is unwavering. During the quarter, we leveraged our NS leadership framework to strengthen our field safety. We continued our efforts to focus on mainline accident reductions and we commissioned three additional inspection portals and added field sensors. These have contributed to our best-in-class mainline accident rate. We also conducted two cross-functional leadership safety summits, strengthening our capabilities and reinforcing safety from the ballast to the boardroom.
Turning to slide six. Our metrics improved across all of our core network performance indices. Our balanced approach proved safety, service and cost improvements work best together. Year-to-date, we have reduced our active online motor power fleet by 320 locomotives and have targeted an additional 100 reductions in the second half.
As we store locomotives, we use reliability metrics to remove the worst performers, driving up overall fleet reliability and driving down maintenance, materials and fuel expense. Quarter-over-quarter, we increased our GTMs for available horsepower by 6% and our car velocity by 6%. Both improvements are the result of design processes that drive out time and cost, both in terminals and over the road.
Our strategy includes structural improvements in fuel procurement, materials management, purchase service optimization, crew cost efficiency and productivity enhancements. So let's take a look at a few of the initiatives in the pipeline that are closing the gap as we track for the $250 million cost takeout commitment.
Turning to slide seven. We have delivered a 6% improvement in car velocity by reducing handlings, extending train schedules and improving connection performance. Car velocity is something I monitor closely. It captures improvements in our operating plan, terminal execution and over-the-road performance.
For example, during the quarter, we eliminated over 700 unnecessary car handlings per day. Driving car velocity in response to overall train speed improvements includes working with our customers to rightsize the inventory in their pipelines as train speed and car velocity improve, fewer cars are required to service the current volume.
In the quarter, we delivered a reduction of 3% of cars online. We are improving safety, train speed and service reliability by addressing unscheduled train stops and dispatching practices. For example, our mechanical war rooms root cause analysis of every unscheduled train stop has resulted in an 18% reduction of fees and scheduled stops in Q2.
We have a new network operations watchdog team, bringing extreme discipline to planned adherence. They challenged the root cause for every extra train. This has instilled network-wide visibility and accountability to execution and planning. I'm really encouraged that this has increased connections and train yield and has driven out extra train starts from 200 in March to just 50 in June. These improvements to our operating plan and terminal discipline have resulted in a 4% reduction in crew starts.
The combination of crew and overtime reductions has dropped our crew expense per kGTM by 8% compared to Q1. As operational effectiveness grows, we are recalibrating our standards and sweating the network resources even further. This is the path to at least 7% to 10% improvement in car velocity. Yard and local redesigns are underway. We driving out waste and rework in the first mile and last mile operations. We are unlocking the capacity to take on additional work within the same footprint.
Efficiency in this space is really important to me since we allocate approximately 50% of crew starts here. Over the next 24 months, we will continue to improve fuel productivity. We will continue to push locomotives, leverage trip optimizer to assertively manage horsepower per ton, turn power more quickly, improve fuel distribution and vendor accountability and increased train size. We are targeting locomotive productivity improvements of an additional 8%.
One of my personal objectives is to develop the next generation of skilled PSR railroaders and to build the bench strength to sustain the improvements that I'm leading. We are structuring the organization to drive the daily and strategic outcomes, and I am proud and encouraged by the engagement of people in every department and across the entire organization.
The team is working collaboratively and with confidence. Our team is energized and motivated to build upon the strength of the quarter and deliver the next wave of initiatives that will yield savings in all P&L categories beyond just comp and bang, but in materials, rents and purchased services, success breeds success.
I want to close out my remarks on slide eight and nine with two flywheel examples of balancing service and cost. In automotive, our car velocity increased by 16%, creating the platform for growth as our carloads increased by 7%. Within intermodal, shipments and service performance simultaneously increased by 8%. This following the 15% lane rationalization we discussed earlier this quarter. And what's really important to me is that we are launching our NS intermodal reservation system in September. This smooth strain demand reduces rents and expenses and creates service certainty.
Our customers are enjoying some of the best sustained service ever. At the same time, we have consolidated train starts, streamlined our service plan, reduced handling complexity and have driven out cost. We are unlocking tremendous value within our franchise, adding new capability, urgently eliminating waste and driving to a sub-60 OR.
Now I'll turn it over to Ed.
