ATLANTA — Atlanta-based railroad operator Norfolk Southern says tariffs are having a modestly positive impact on its business, as more companies turn to rail as a cost-saving transportation option.
During a quarterly earnings call, company executives said they are maintaining their full-year revenue growth guidance of 3%, despite broader market uncertainty. CEO Mark George said the railroad’s primarily domestic focus is helping shield it from potential disruptions.
“We’re largely a domestic business; 75% of our business is U.S. domestic,” George noted. “We haven’t seen negative trends yet that would really alarm us or cause us to do anything; that said, we’re scenario planning.”
With rising costs tied to tariffs, businesses are increasingly shifting freight from trucks to rail, which while typically slower, is often more economical. Norfolk Southern’s Executive Vice President Ed Elkins said customer behavior reflects that trend.
“All the indications that we see from our customer base are that, number one, they’re seeing increasing value in the product we’re delivering, and number two, they’re looking for ways to save money,” Elkins said. “If they have a service product they can trust from us, then we are a great resource for them to de-risk their supply chain from a cost perspective.”
Company leaders say they expect this shift in transportation strategy to continue, as businesses across sectors adjust to the financial impact of ongoing tariffs.
Norfolk Southern’s latest earnings reflect steady performance, and the company says it remains confident in its outlook for the rest of the year.
WSBs Ashley Simmons contributed to this story