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Home » East Palestine Train Derailment Has Cost Norfolk Southern Almost $1B

East Palestine Train Derailment Has Cost Norfolk Southern Almost $1B

A NORFOLK SOUTHERN TRAIN IS GOING DOWN TRAIN TRACKS SURROUNDED BY HOUSES AND GRASS ON A GREY DAY.
Lithia, Virginia. December 2021. Photo: iStock.com/Wirestock
July 28, 2023
SupplyChainBrain

The February 2023 train derailment in East Palestine, Ohio has now cost Norfolk Southern Railways almost $1 billion.

The organization said that it took a $416 million charge against its Q2 2023 earnings to cover the ongoing estimated clean-up costs of the derailment site, according to CNN. Prior to that, the company was charged $387 million during Q1 2023 for clean-up and compensation costs.

Chief financial officer Mark George told investors that the company estimated it lost between $175 million and $200 million in revenue from business diverted to trucks and other railroads by Norfolk Southern customers due to service disruptions caused by the derailment.

On February 3, 2023, a Norfolk Southern Railway train carrying toxic chemicals derailed in East Palestine, Ohio, resulting in the release of hazardous materials into the air, soil and surrounding creeks. Following the derailment, emergency responders conducted an hours-long controlled release and burn of vinyl chloride from five tank cars, creating a large ball of fire that discharged black smoke filled with contaminants into the air.

A preliminary report into the incident, issued by the National Transportation Safety Board (NTSB) February 23, 2023, found that a wheel bearing on one of the railcars overheated and failed just moments before the train derailed.

Read more: NTSB Holds Investigative Hearing into East Palestine Train Derailment

The NTSB held an investigative hearing June 22 and 23 at the East Palestine High School in Ohio to gather sworn testimonies regarding the train derailment as part of a fact-finding step in the organization's safety investigation. The NTSB said that the full investigation will take approximately 12 to 18 months to complete from the time the accident occurred.

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