Reliability, Safety and the Licence to Operate

On the evening of 3 February 2023 a Norfolk Southern freight train, 32N, of about 149 cars, was running east through East Palestine, Ohio, a village of about 4,700 people near the Pennsylvania line. A wheel bearing on one of its hopper cars was overheating. Trackside detectors along the route recorded the rising temperature, but the reading reached the railroad's alarm threshold only at the detector shortly before the village, and by the time the crew braked the car had failed. About 38 cars derailed, about 11 of them carrying hazardous materials, and fires burned among the wreckage (NTSB findings and preliminary report, reported). No one was killed in the derailment.

Responders evacuated residents within about a mile. Fearing that vinyl chloride in five of the tank cars was polymerising and could explode, the railroad's contractors and the incident command recommended releasing and burning it, and on 6 February they did, sending a black plume over the town. Residents were allowed home on 8 February. On 21 February the Environmental Protection Agency ordered Norfolk Southern to carry out and pay for the cleanup (reported). The main line reopened within days; the excavation of contaminated soil and treatment of water went on for more than a year. The chief executive, Alan Shaw, testified to the Senate in March. The National Transportation Safety Board's final findings, in June 2024, attributed the derailment to the bearing failure, criticised the railroad's detector practices and found that the vent and burn had not been necessary, because the cars were not polymerising; the railroad disputed parts of that characterisation (reported).

The bill came in stages. Norfolk Southern agreed a class-action settlement of about $600 million with residents and businesses in April 2024 and a settlement of about $310 million with the Justice Department and the EPA in May 2024, and by January 2025 estimated the total cost at about $2.2 billion, of which it expected insurance to cover at least about $751 million (reported). Insurance recoveries exceeded incident expenses in 2025. The rest of the cost was harder to count. A bipartisan Railway Safety Act proposed rules on detectors, train length, crew size and hazardous-material notification, and stalled. The activist investor Ancora used the derailment in a campaign against management and won three of thirteen board seats at the May 2024 annual meeting, at which Shaw was re-elected; the board dismissed him in September 2024 over a workplace relationship and named the finance chief, Mark George, chief executive (company, reported). In 2026 safety and East Palestine featured in the comments filed on Union Pacific's proposed merger with Norfolk Southern, due at the Surface Transportation Board on 18 November.