Josh Raglin has dedicated over 25 years in the fields of conservation, forestry, and environmental stewardship. As chief sustainability officer at Norfolk Southern, he leads efforts to transform the company’s sustainability strategy. He champions initiatives that integrate sustainability practices into daily operations to achieve efficiencies, control costs, generate revenue, and reduce environmental impacts. These efforts include close collaboration with department leaders company-wide, along with external stakeholders such as customers, investors, regulators, and communities.

Josh Joins Sustainable Nation to Discuss:

• Advancing efficiency of rails including the Locomotive Modernization program

• The economic and environmental benefits of shipping by rail, and the feasibility of making the switch to rail

• Benefits to customers from Norfolk Southern’s carbon calculator 

• Norfolk Southern's five pillars of sustainability, specifically nature-based solutions

• Advice and recommendations for sustainability professionals

Josh’s Responses:

Thank you for joining us, Josh. We're looking forward to diving in. I've already given our listeners some background on your professional life, but could you tell us about your personal life and what led you to pursue the work you're doing today?

Yes, I have a long history of enjoying the outdoors. Growing up, I was always drawn to nature, which led me to study wildlife management in college. From there, I went to work for the rail industry, spending two decades focusing on nature-based solutions.

Outside of work, I've been actively involved with conservation groups through volunteer efforts. This passion for the outdoors is not only personal but shared with my family. Whether it's vacation time or just a weekend getaway, we often incorporate nature into our leisure activities. Currently, my wife and I live in Atlanta, and we have two children who are in college.

Excellent. Could you begin by telling our listeners who may not be familiar with Norfolk Southern a bit about the company? I'm interested in learning about the size, what your team does, and your specific responsibilities as Chief Sustainability Officer.

Yes, Norfolk Southern's primary business revolves around freight rail. We operate across the eastern 22 states, encompassing 19,000 route miles and shipping over 7 million shipments annually. Serving over 50 ports in the eastern United States, we boast the most extensive intermodal network, with more than 50 terminals.

These terminals handle the containers you often see moving via various modes of transportation. As the largest shipper of automobiles and steel, our services are vital for our customers, especially as they increasingly consider decarbonization in their logistics decisions.

Rail has a distinct advantage here: we emit 75% fewer emissions than trucks on average, and in some cases, up to 90% less. This means we're not only a more cost-effective and safer way to move products but also a more sustainable option.

In my role as Chief Sustainability Officer at Norfolk Southern, I lead our efforts to embed sustainability across the organization. I often compare sustainability to safety, as both are everyone's responsibility. When we succeed in fully integrating sustainability, it becomes a core part of our values and identity as an industry.

We have a proud history when it comes to sustainability, and our culture revolves around it. I see us continuing to grow in this direction as a company and as an industry, only getting better from here.

Excellent, that's good to know. In my work conducting greenhouse gas inventories for numerous companies, I've found that product distribution is a significant source of emissions that many are keen to reduce. As you mentioned, rail offers a valuable solution for cutting emissions, especially for those traditionally shipping by truck.

If a company wants to make this shift, how feasible is it? What does the process look like? Could you offer some insight into the ease of transitioning from truck to rail and share any advice you would give to a company considering this move?

Yes, I'll begin with the topic of scope three emissions. In many cases, these supply chain emissions make up 90% of a company's total emissions. I recently spoke with a customer who found that a third of these emissions were from contracted transportation. As companies have become more adept at measuring and reporting scope three emissions, they are now progressing to managing these emissions and setting goals around them.

I dedicate roughly a third of my time to collaborating with our commercial team and customers, focusing on how we can both reduce their emissions and solve their logistics challenges. For many shippers or receivers, rail access might not be immediately available, but we provide that through new opportunities, such as our extensive intermodal network in the east. We ship over 4 million containers annually across many terminals.

Though you might see a truck pick up a container at one end and another truck deliver it at the other, the long haul is usually handled by rail. We work with active channel partners like RJV, Hunt, and the Hub Group to facilitate this process for customers eager to explore intermodal shipping.

We also support our customers through our bulk transfer network, with over 40 facilities that we own and a couple of hundred additional ones on our railroad. For heavy goods like grain or plastic products, customers can take advantage of these transfer facilities, utilizing trucks for short routes and rail for long hauls.

Our modal logistics team is equipped to analyze customers' trucking data and present them with an array of choices that incorporate traditional rail, intermodal, and bulk transfer options. This approach is currently being employed with many of our customers wanting to increase their use of rail.

That sounds fantastic. Rail already stands out as more efficient with less carbon emission than trucking, but it appears that you're striving to widen that gap even further. I noticed that you've improved locomotive fuel efficiency by 7% since 2019. Could you shed light on what contributes to this achievement in advancing the efficiency of rail systems? And how do you envision the future in terms of continuing this trend of efficiency?

Yes, it's essential to recognize that locomotive diesel constitutes over 90% of our emissions and ranks as our third-largest expense. Hence, any enhancement in efficiency will undoubtedly benefit both the environment and our bottom line.

We initiated a locomotive modernization program in 2016, committing over a billion dollars to update more than 100 locomotives annually. This involves taking 20 to 25-year-old locomotives and refurbishing them with state-of-the-art technology, leading to a potential 24% improvement in fuel efficiency, a substantial gain.

Furthermore, our continuous deployment of energy management technology resembles a highly intelligent cruise control system that can optimize our routes and timings, almost akin to an autonomous rail function.

Additionally, we've focused on operating our network more efficiently through timely runs and transporting heavier commodities. Considering that we measure efficiency by miles, gallons, and weight, our capabilities in moving a ton of freight up to 800 miles on a single gallon of fuel offer a compelling advantage over truck transport.

Our ongoing investments include our fleet and low carbon fuels like biofuel and renewable diesel. As we look towards our goal for 2034, a 42% reduction in emissions intensity, we're also exploring innovative solutions such as battery electric locomotives, diesel battery hybrids, and even hydrogen fuel cell-powered trains.

With more than $8 billion available for hydrogen, there are significant opportunities, whether as a consumer or transporter of these low carbon fuels. Our industry's alignment with seven major Class 1 railroads in North America on science-based targets reaffirms our commitment to this path, reinforcing our optimistic outlook.

Oh, that's great. So it sounds like there's a plan for a net zero future for the entire rail industry.

Well, the pathway to zero-emissions freight locomotives is indeed a long-term vision. Considering there are presently no zero-emissions freight locomotives globally, and with 35,000 diesel units in North America alone, the transition is an extended process. Safety concerns around alternative fuels such as hydrogen and the need for significant infrastructure development cannot be overlooked.

However, we must think about shipping and freight transportation more comprehensively. Rather than merely focusing on individual vehicles, let's consider the interplay between truck and rail. Imagine if I were to tell you that it's possible to reduce truck emissions by an impressive 75%, even up to 90% in some cases. This solution isn't futuristic or reliant on breakthrough technology. It's available now, and it's called rail.

What we need is for customers to reevaluate their supply chain and give rail transportation a seat at the table. This is an integral part of our strategic plan: to become more customer-centric, to offer the consistency that customers expect from trucking, and to provide complete transparency regarding shipment locations. All of these factors align with our goal of increasing our volumes and assisting shippers in lowering their supply chain emissions. This is not just about innovation; it's about application, collaboration, and embracing existing, efficient technologies.

That's great when they look to make that change. Typically. Is there a cost associated? Is there a reduced cost from going from trucking to rail? Similar costs? What does that look like for the customer?

The majority of the time it's less cost. So we're the most economical way to ship product across the land. We're the safest way. We reduce congestion on our nation's roads, the wear and tear, the financial commitment there. And at the same time, we have the greenhouse gas emissions advantage as well. And that's the important thing about inflation.

What we've seen in inflation, a lot of that inflation is due to the transport cost that goes into moving every product. So if you can reduce your shipping expense by 25%, 40% overall, then that means you can keep the price of your product lower. But when those prices go up significantly, that cost gets passed along to the consumer.

Sure. You mentioned these 30,000 or something. I think it was diesel locomotives. Are those able to be switched to? Can they run just the way they are on renewable diesel or on biofuel?

Currently, there are around 35,000 diesel freight locomotives operating in North America. A promising aspect is that the majority of these can run on up to a 5% biofuel blend, something that has already received approval from manufacturers. Impressively, one manufacturer has even approved a blend of up to 20%, with another manufacturer conducting further tests. We're optimistic that a 20% blend will become a reality in the short term, possibly within the next year or two.

This development will undoubtedly open up new opportunities to decarbonize through renewable diesel fuel. Presently, most of this product is being produced in the Gulf Coast states but finds its market on the West Coast. Three states there have low carbon fuel standards that incentivize this type of fuel. For example, in California, 100% renewable diesel can sometimes be purchased at the pump at a price lower than traditional diesel.

What we urgently need to catalyze this transformation in the eastern United States is for states to adopt similar low carbon fuel standards. This policy change would create incentives for such products, aligning with broader sustainability goals and making renewable diesel more accessible and appealing.

Got you. And was there anything in the Inflation Reduction Act that is going to help move more shipping to rail or help the industry advance its low carbon initiatives?

Yeah, I think that the biggest thing that we're following there is the hydrogen hub applications that I mentioned. A number of our customers are engaged in these applications. There's going to be probably somewhere between six and ten hubs across the United States.

We think at least three or four of those will be in our territory. And that would create opportunities for testing some of these prototype locomotives to run on hydrogen fuel cells. So that's quite a considerable amount of money that's in that program. But there's a lot of focus on hydrogen right now, and there's a lot of investments that are occurring even without the Inflation reduction act.

Excellent. I wanted to ask you about your Science Based Target(SBT) reducing emissions 42% by 2034. It's commendable to have such a target in place. How did you go about getting a target like that approved in the organization and convince leadership and folks across the organization that we need to do this? Was it a movement in the industry or were you trying to kind of set the pace for the industry? Did you see strong business value that can be created there? What was your approach to establishing that and getting it approved?

Indeed, our journey towards sustainable goals has been both evolutionary and progressive. Dating back to 2008, we initiated a series of multi-year fuel efficiency targets. However, as the industry began to shift its focus towards more comprehensive and long-term objectives, we sensed a compelling need to align with this trend. This was not merely an industry-led initiative but a profound realization within our organization that embracing science-based targets was the right way forward.

The shift towards these targets has spurred innovation and collaborative momentum. It has extended our view beyond locomotives, leading us to evaluate renewable energy sources, our entire vehicle fleet, large equipment like our intermodal cranes, and more. For instance, we have been actively replacing various units with hybrid and fully electric ones. By embracing a holistic approach towards emissions, we are not only accelerating the pace at which we reduce emissions but also unlocking significant financial savings for the company.

This decision reflects our belief in responsible stewardship, and it aligns with our commitment to operational excellence and sustainable growth.

I wanted to ask you about using data, using technology. You said a lot of your work is interacting with customers and helping them understand the impacts, reduced impacts of rail, and of using your rail system. And it looks like you developed a carbon calculator for customers to use to be able to accurately and understand the impacts of their shipments. Can you tell us a little bit about this and how that's bringing value to customers?

Yeah, we recognize that at least 25% of our largest 200 companies have decarbonization goals, with some aiming for net zero. So the question arises: how can we provide them with the data they need for making informed logistics decisions? To address this, we conducted an internal analysis of over 7 million shipments from the year 2021, developing a fuel efficiency factor for 30 different commodities, plus intermodal. This information is now publicly available on our website at norfolkseathern.com, covering the entire U.S. rail and highway system. This extends beyond our boundaries, offering insights for shippers moving products all across the U.S. It's supported by rigorous data analysis that we performed, providing the detail our shippers require when making logistics decisions.

What's particularly striking about our findings is that shipping via rail is considerably more efficient than previously thought. For instance, our analysis shows that our fastest-growing segment, intermodal, can be up to seven times more efficient than moving the same container via truck. This contrasts with historical data suggesting only two to three times greater efficiency.

This data is crucial to our channel partners, many of whom serve customers shipping products via both truck and rail. These clients aren't only comparing the delta on price, consistency, and service, but they're also factoring carbon into their logistics decisions. Quantifying the difference between truck and rail with real data adds credibility to our offerings and supports their decision-making.

Interestingly, when I first began conversations with customers three years ago, the focus was mainly on logistics and sourcing. But now, these dialogues have elevated to higher levels, even involving senior company teams in some instances. That's because companies have committed to decarbonization goals, and they're integrating those goals throughout their organizations. As we align our services and highlight our sustainability advantage, we see a tremendous opportunity for growth.

Obviously, the big focus and the compelling story is your ability to reduce customer emissions and the substantial reductions in greenhouse gas emissions that rail can offer as opposed to truck and other options. But what stands out is how you've seamlessly integrated this focus throughout the organization. You've highlighted impressive diversity, equity, inclusion statistics in your sustainability report, made strides in governance, and diverted more than half your waste from landfills, achieving about a 50% diversion rate. You're also incorporating recycled content into rail operations, among other commendable initiatives. Could you elaborate on your approach to integrating sustainability across the business? This isn't just about focusing on the customers and what the product can offer but extends to your entire organization. What insights can you share, and what advice would you give others looking to weave sustainability throughout their operations?

Yeah, so one way we approached it, Josh, is we created a Corporate Sustainability Advisory Council. We have leaders from every department across our organization participating in that council. This council not only guides our strategy around sustainability but also shapes the actual initiatives that will help us meet our goals. One significant development by this group was the formation of the five pillars of our sustainability strategy. Each of these five pillars has a leader, a departmental leader, and a cross-departmental team. That's really how we drive sustainability across the organization. I'll outline the five pillars very briefly:

1. Decarbonization: Focused on our Scope 1 emissions.

2. Facilities: Concentrating on our Scope 2 emissions, our built environment, and water.

3. Circularity: Primarily zeroed in on the waste reduction and recycling you mentioned.

4. Partners: This used to be called 'suppliers,' but as we've advanced in our sustainability journey, we realized it involves working with customers, industry peers, government, research institutions, and NGOs.

5. Nature-Based Solutions: This explores how we approach and strategize around nature.

So that's been our focus on how we can embed sustainability across the organization. As I often tell people, I'm a department of one, but sustainability is a team of 19,000. It takes all of us, concentrated on sustainability, to drive genuine change across the organization. Making connections and personalizing sustainability for individuals is key to achieving that level of engagement.

Excellent. And speaking of nature-based solutions, maybe folks don't really associate that with a rail company. Why is that an important pillar? And what are you doing around nature-based solutions and biodiversity?

Yeah, I would say one of the places where I started my career with the railroad was at our Brosnan Forest facility in South Carolina. That's a 14,000-acre piece of property that has been in our railroad family since the beginning, since the 1830s. So we've had this land for a long time. We've been very involved in forestry since the creation of the rail industry, depending not only on wood products to provide our infrastructure but also transporting raw wood products and finished wood products.

Today, that still represents around 8% of our business. So we've been really engaged in forestry. We've done a lot of experimentation there. We've done a lot of ecological restoration, not only of ecosystems themselves but also of the animals that are there, even endangered species. We've done a lot of wetland and stream restoration projects. We've got one large one that's wrapping up now; it's another 1100-acre project. And so it's vital for us to do things that are good for the environment and good for nearby communities.

They're also good for the economics, good for the bottom line as well. Just for example, our wetland and stream projects create credits for us that can assist local projects such as road projects and industry development projects, so it's really about how we approach the environment differently. How can we think about win-win solutions? Another example is our Lambert's Point Living Shoreline project in Norfolk, Virginia.

We've got a sizable piece of property there on the Elizabeth River, and we were starting to lose shoreline due to tidal change, ship action, wave action, and so forth. And we worked with a local conservation group to take a different approach there. Instead of constructing a fully hardened shoreline, we chose to create more of a living shoreline with native plants and grasses, reestablishing that ecosystem in a more natural way.

It saved us over half the money compared to doing a fully armored shoreline. And it looks really good. So that was completed two years ago. And now, we're thinking about the environment a bit differently, looking at other opportunities across our other real estate assets within our 22-state network.

What is one piece of advice you would give other sustainability professionals that might help them in their careers?

I would say network. You can't know too many people. The more you network, the more connections you make. Not only internally within your company but externally as well. That's going to increase your knowledge base. Many of our customers have just started their sustainability programs in the last three or four years, and so I can be a resource for them in helping them start their journey, and I really enjoy doing that.

What are you most excited about right now in the world of sustainability?

I think it's the excitement, the corporate commitment that you're seeing, and where we've gone in such a short period of time. And it's voluntary. We're getting the support of all of our stakeholders. It's important to our customers, our investors, our regulators, and it's important to our employees as well.

What is one book you'd recommend sustainability professionals read?

It's actually one I just completed. It's called How the World Really Works, and it's by an energy scientist Vaclav Smil. He's written a number of books over the years, and he's not a pessimist, he's not an optimist, he's a scientist. He really does a great way of explaining the science, particularly when it comes to energy. I really highly recommend that to anyone.

What are some of your favorite resources or tools that really help you in your work?

I would say probably my engagement with outside groups. I really enjoy engaging with conservation related groups or environmental groups and understanding our natural environment more and how Norfolk Southern can be a part of that. Whether it's employee engagement, whether it's financial support, or volunteering. A number of our employees, we volunteer on boards, we attend events, and it's not just about doing railroading, but it's also about how we can engage with the community to really make a difference.

Where can our listeners go to learn more about you and the sustainability work being done at Norfolk Southern?

I'm on LinkedIn, so if you look up Josh Raglin Norfolk Southern, you'll find me pretty easily. And our website is www.nscorp.com/betterplanet.