The Atlanta-based railroad provided that estimate of the cost of the Feb. 3 derailment outside East Palestine, Ohio, Wednesday when it released its first-quarter earnings report.
OMAHA, Neb. — Norfolk Southern expects February’s fiery Ohio derailment to cost it $387 million, but that total will likely increase over time and that doesn’t reflect how much the railroad’s insurance companies will eventually cover.
The $387 million estimate includes the $30.9 million the railroad pledged to help residents and the community around East Palestine recover from the derailment. Norfolk Southern said it has already spent about $55 million to dig up and remove nearly 34,000 tons of contaminated soil and trucked away another 13.2 million gallons of tainted water.
Norfolk Southern and other major freight railroads have announced new safety measures, including installing more than 1,000 more trackside detectors. But they’re not likely to totally abandon the lean operating model adopted over the past six years that labor unions say has made the industry riskier because so many jobs have been cut, forcing inspections to be rushed and leaving train crews on call 24-7.
Norfolk Southern’s first quarter profit fell 34% to $466 million, or $2.04 per share, because of the derailment costs. That’s down from $703 million, or $2.93 per share, a year ago.
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