UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549
                          -----------------------


                                 FORM 10-Q


(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended MARCH 31, 2001

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the transition period from           to
                                    ----------  ----------
          Commission file numbers 1-743; 1-3744; 1-4793; 1-546-2


                     NORFOLK SOUTHERN RAILWAY COMPANY
-------------------------------------------------------------------------
          (Exact name of registrant as specified in its charter)

            Virginia                               53-6002016
-----------------------------------     ---------------------------------
(State or other jurisdiction of         (IRS Employer Identification No.)
 incorporation or organization)

     Three Commercial Place
       Norfolk, Virginia                           23510-2191
-----------------------------------     ---------------------------------
(Address of principal executive offices)            Zip Code


Registrant's telephone number, including area code   (757) 629-2680
                                                  -----------------------


                                 No Change
-------------------------------------------------------------------------
           (Former name, former address and former fiscal year,
                      if changed since last report.)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  (X) Yes
( ) No

The number of shares outstanding of each of the registrant's classes
of Common Stock, as of the last practicable date:

                Class                Outstanding as of April 30, 2001
                -----                --------------------------------
     Common Stock (par value $1.00)            16,668,997


                                     2


                             TABLE OF CONTENTS
                             -----------------

                                                                  Page
                                                                  ----
Part  I.    Financial Information:

        Item 1.  Financial Statements:

                 Consolidated Statements of Income
                 Three Months Ended March 31, 2001 and 2000          3

                 Consolidated Balance Sheets
                 March 31, 2001, and December 31, 2000               4

                 Consolidated Statements of Cash Flows
                 Three Months Ended March 31, 2001 and 2000          5

                 Notes to Consolidated Financial Statements          6

        Item 2.  Management's Discussion and Analysis of
                 Financial Condition and Results of Operations      10

        Item 3.  Quantitative and Qualitative Disclosures
                 About Market Risks                                 14

Part II.    Other Information:

        Item 6.  Exhibits and Reports on Form 8-K                   15

Signatures                                                          16


                                     3

                      PART I.  FINANCIAL INFORMATION
                      ------------------------------

Item 1.   Financial Statements.
------    --------------------

<TABLE>
             NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
       (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
                     Consolidated Statements of Income
                              ($ in millions)
                                (Unaudited)

<CAPTION>
                                                  Three Months Ended
                                                      March 31,
                                                  ------------------
                                                  2001          2000
                                                  ----          ----
<S>                                              <C>            <C>
Railway operating revenues:
 Coal                                            $  393         $ 347
 General merchandise                                871           915
 Intermodal                                         238           210
                                                 ------        ------
   TOTAL RAILWAY OPERATING REVENUES               1,502         1,472
                                                 ------        ------

Railway operating expenses:
 Compensation and benefits (Notes 3 and 4)          394           651
 Materials, services and rents (Note 4)             486           344
 Conrail rents and services (Note 4)                117           131
 Depreciation                                       123           121
 Diesel fuel                                        117           115
 Casualties and other claims                         37            32
 Other                                               76            84
                                                 ------        ------
   TOTAL RAILWAY OPERATING EXPENSES               1,350         1,478
                                                 ------        ------

      Income (loss) from railway operations         152            (6)

Other income (expense) - net                        (45)          (33)
Interest expense on debt                             (8)          (10)
                                                 ------        ------
      Income (loss) before income taxes              99           (49)

Provision (benefit) for income taxes                 37           (19)
                                                 ------        ------

      NET INCOME (LOSS)                          $   62        $  (30)
                                                 ======        ======

</TABLE>

See accompanying notes to Consolidated Financial Statements.

                                     4

Item 1.   Financial Statements.  (continued)
------    --------------------
<TABLE>
             NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
       (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
                        Consolidated Balance Sheets
                              ($ in millions)
                                (Unaudited)

<CAPTION>
                                              March 31, 2001  Dec. 31, 2000
                                              --------------  -------------
<S>                                             <C>            <C>
ASSETS
Current assets:
 Cash and cash equivalents                      $    27        $    --
 Short-term investments                              --              1
 Accounts receivable, net (Note 4)                  147            146
 Due from Conrail (Note 4)                           20             31
 Materials and supplies                              90             89
 Deferred income taxes                              161            173
 Other current assets                                67            125
                                                --------       --------
     Total current assets                           512            565

Investments (Note 6)                                584            486
Properties less accumulated depreciation         10,637         10,483
Other assets                                        529            483
                                                --------       --------
     TOTAL ASSETS                               $12,262        $12,017
                                                ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                               $   834        $   902
 Income and other taxes                             216            221
 Due to NS - net (Note 4)                            47             26
 Notes and accounts payable to Conrail (Note 4)     219            155
 Other current liabilities                          151            159
 Current maturities of long-term debt                89             80
                                                --------       --------
     Total current liabilities                    1,556          1,543

Long-term debt                                      842            691
Other liabilities                                 1,045          1,061
Minority interests                                    3              3
Deferred income taxes                             3,603          3,613
                                                --------       --------
     TOTAL LIABILITIES                            7,049          6,911
                                                --------       --------

Stockholders' equity:
 Serial preferred stock                              55             55
 Common stock                                       167            167
 Additional paid-in capital                         695            695
 Accumulated other comprehensive income (Note 6)    203            157
 Retained income                                  4,093          4,032
                                                --------       --------
     TOTAL STOCKHOLDERS' EQUITY                   5,213          5,106
                                                --------       --------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $12,262        $12,017
                                                ========       ========
</TABLE>

See accompanying notes to Consolidated Financial Statements.
                                     5

Item 1.   Financial Statements.  (continued)
------    --------------------
<TABLE>
             NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
       (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
                   Consolidated Statements of Cash Flows
                              ($ in millions)
                                (Unaudited)

<CAPTION>
                                                       Three Months Ended
                                                           March 31,
                                                       ----------------
                                                         2001      2000
                                                         ----      ----

<S>                                                      <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                       $  62     $ (30)
 Reconciliation of net income (loss) to net cash
  provided by operating activities:
   Depreciation                                            123       121
   Deferred income taxes                                   (39)      (28)
   Nonoperating gains on properties and investments         (7)       (3)
   Changes in assets and liabilities affecting operations:
     Accounts receivable                                    (1)     (105)
     Materials and supplies                                 (1)      (19)
     Other current assets and due from Conrail              69        88
     Income tax liabilities                                 23        10
     Other short-term liabilities                         (106)      105
     Other - net                                           (52)       49
                                                         -----     -----
       Net cash provided by operating activities            71       188

CASH FLOWS FROM INVESTING ACTIVITIES:
 Property additions                                       (273)     (168)
 Property sales and other transactions                       2        30
 Investments, including short-term                         (33)      (20)
 Investment sales and other transactions                     2        32
                                                         -----     -----
       Net cash used for investing activities             (302)     (126)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Dividends                                                  (1)       (1)
 Advances to NS                                             --       (37)
 Advances and repayments from NS                            21        28
 Proceeds from borrowings                                  258        68
 Debt repayments                                           (20)      (86)
                                                         -----     -----
       Net cash provided by (used for)
           financing activities                            258       (28)
                                                         -----     -----
       Net increase in cash and cash equivalents            27        34

CASH AND CASH EQUIVALENTS:
 At beginning of year                                       --        --
                                                         -----     -----
 At end of period                                        $  27     $  34
                                                         =====     =====

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 Cash paid during the period for:
   Interest (net of amounts capitalized)                 $  34     $  52
   Income taxes                                          $  60     $  (1)

See accompanying notes to Consolidated Financial Statements.
                                     6

Item 1.   Financial Statements.  (continued)
------    --------------------

        NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES (NS RAIL)
    (A Majority-Owned Subsidiary of Norfolk Southern Corporation [NS])
                Notes to Consolidated Financial Statements

1.   In the opinion of Management, the accompanying unaudited interim
     financial statements contain all adjustments (consisting of
     normal recurring accruals) necessary to present fairly the
     Company's financial position as of March 31, 2001, and its
     results of operations and cash flows for the three months ended
     March 31, 2001 and 2000.

     Although Management believes that the disclosures presented are
     adequate to make the information not misleading, these
     Consolidated Financial Statements should be read in conjunction
     with:  (a) the financial statements and notes included in the
     Company's latest Annual Report on Form 10-K and (b) any Current
     Reports on Form 8-K.

2.   Commitments and Contingencies

     There have been no significant changes since year-end 2000 in the
     matters as discussed in NOTE 15, COMMITMENTS AND CONTINGENCIES,
     appearing in the NS Rail Annual Report on Form 10-K for 2000,
     Notes to Consolidated Financial Statements, beginning on page 61.

3.   Workforce Reduction Costs in 2000

     First-quarter 2000 "Compensation and benefits" expenses include
     $101 million of costs related to actions taken to reduce the size
     of the work force, which reduced net income by $62 million.
     These costs resulted principally from a voluntary early
     retirement program, accepted by 919 of 1,180 eligible employees.
     The retirements were effective March 1, 2000, and most of the
     related benefits will be paid from the overfunded pension plan.
     The resulting noncash reduction to NS Rail's pension plan asset
     is included in "Other - net" in the Consolidated Statements of
     Cash Flows.  In addition, an accrual was made for certain
     postemployment benefits due to some union employees who were
     furloughed.

4.   Related Parties

     General
     -------
     NS is the parent holding company of NSR.  Rail operations are
     coordinated at the holding company level by the NS Vice Chairman
     and Chief Operating Officer.  Effective June 1, 2000, NS charges
     NS Rail a fee for management services it performs for NS Rail
     (which totaled $144 million and included a $9 million mark-up in
     the first quarter of 2001).  Previously, the costs of functions
     performed by NS were charged to NS Rail.  As a result, costs that
     were previously included in "Compensation and benefits" are
     reflected in "Materials, services and rents."  In addition, NS
     charges NS Rail a revenue-based licensing fee (which totaled $21
     million in each of the first quarters of 2001 and 2000) for use
     of certain intangible assets owned by NS.

     NS Rail owns 21,363,974 shares of NS common stock.

     Operations Over Conrail's Lines
     -------------------------------
     Overview -- NS and CSX Corporation (CSX) jointly own Conrail Inc.
     (Conrail), whose primary subsidiary is Consolidated Rail
     Corporation (CRC), the major freight railroad in the Northeast.
     NS has a 58 percent economic and 50 percent voting interest in
     the jointly owned entity, and CSX has the remainder of the
     economic and voting interests.

                                     7

Item 1.   Financial Statements.  (continued)
------    --------------------

     Operations of Conrail's Lines -- NSR operates as a part of its
     rail system the routes and assets of Pennsylvania Lines LLC
     (PRR), a wholly owned subsidiary of CRC, pursuant to operating
     and lease agreements.  Costs necessary to operate and maintain
     the PRR assets, including leasehold improvements, are borne by
     NSR.  CSX Transportation, Inc. (CSXT) operates the routes and
     assets of another CRC subsidiary under comparable terms.  Certain
     other Conrail routes and assets (the "Shared Assets Areas")
     continue to be operated by CRC for the joint and exclusive
     benefit of NSR and CRXT.  In addition to a fee paid for such
     access, NSR and CSXT pay, based on usage, the costs incurred by
     CRC to operate the Shared Assets Areas.

     NS Rail's Consolidated Balance Sheets include $105 million at
     March 31, 2001, and $113 million at Dec. 31, 2000, of liabilities
     related to the Conrail transaction, principally for contractual
     obligations to Conrail employees imposed by the STB when it
     approved the transaction.  Through March 31, 2001, NS Rail has
     paid $62 million of these costs.

     NS Rail provides certain general and administrative support
     functions to Conrail, the fees for which are billed in accordance
     with several service-provider arrangements.  Any unpaid balance
     is included in "Due from Conrail."

     "Conrail rents and services" includes expenses for amounts due to
     PRR and CRC for use by NSR of operating properties and equipment
     and operation of the Shared Assets Areas.

     "Notes and accounts payable to Conrail" includes $130 million at
     March 31, 2001, and $51 million, at Dec. 31, 2000, of interest-
     bearing loans made to NS Rail by a PRR subsidiary, payable on
     demand.  The interest rate for these loans is variable and was
     4.8 percent at March 31, 2001.  Also included is $89 million at
     March 31, 2001, and $104 million, at Dec. 31, 2000, due to PRR
     and CRC related to expenses included in "Conrail rents and
     services," as discussed above.

     Sales of Accounts Receivable
     ----------------------------
     From Dec. 1, 1999, through April 30, 2000, NS Rail sold certain
     of its rail accounts receivable, on a nonrecourse basis, to NS.
     Based on the terms of the sale agreement, these sales were
     accounted for as secured borrowings.  The discount is included in
     "Other income (expense) - net" in the Consolidated Statements of
     Income.

     Effective May 2000, NS and NS Rail sold, without recourse, to a
     bankruptcy-remote special-purpose NS subsidiary, a pool of
     accounts receivable totaling approximately $700 million.  The
     pool consisted of receivables NS earlier had purchased from NS
     Rail (as described above), and certain additional NS Rail
     receivables.  NS Rail services and collects all of the sold
     receivables on behalf of the buyers; however, no servicing asset
     or liability has been recognized because the benefits of
     servicing are estimated to be just adequate to compensate NS Rail
     for its responsibilities.  Payments collected from sold
     receivables are remitted to the special-purpose NS subsidiary,
     which, in turn, reinvests the amounts by purchasing new
     receivables from NS Rail.  NS Rail has no retained interest in
     the sold receivables.

     Under the terms of the new sale agreement, the receivables are
     treated as sold and, accordingly, $629 million at March 31, 2001,
     and $607 million at Dec. 31, 2000, of sold receivables are not
     included on the NS Rail Consolidated Balance Sheets.  Fees
     associated with the sale, which are based on historical dilution
     and prevailing interest rates, are included in "Other income
     (expense) - net."

                                     8

Item 1.   Financial Statements.  (continued)
------    --------------------

     Intercompany Accounts
     ---------------------

<CAPTION>
                                 March 31, 2001         Dec. 31, 2000
                                 --------------         -------------
                                          Average               Average
                                         Interest              Interest
                               Balance     Rate      Balance     Rate
                               -------   --------    -------   --------
                                           ($ in millions)

     <S>                       <C>         <C>       <C>         <C>
     Due from NS:
      Advances                 $ 243       5%        $ 261       6%

     Due to NS:
      Notes                     (290)      7%         (287)      8%
                                -----                 -----
       Due to NS - net         $ (47)                $ (26)
                               =====                 =====

     Interest is applied to certain advances at the average NS yield
     on short-term investments and to the notes at specified rates.
     NS Rail's first quarter results include interest income of $3
     million in 2001 and $2 million in 2000 and interest expense of $4
     million in 2001 and $39 million in 2000 (which includes the
     discount on the sales of accounts receivable accounted for as
     secured borrowing, as discussed under the heading "Sales of
     Accounts Receivable," above) related to these intercompany
     accounts.  These amounts are included in "Other income (expense)
     - net."

     Intercompany Federal Income Tax Accounts
     ----------------------------------------
     In accordance with the NS Tax Allocation Agreement, intercompany
     federal income tax accounts are recorded between companies in the
     NS consolidated group.  NS Rail had long-term intercompany
     federal income tax payables (which are included in "Deferred
     income taxes" in the Consolidated Balance Sheets) of $834 million
     at March 31, 2001, and $819 million at Dec. 31, 2000.

5.   Derivative Financial Instruments

     Required Accounting Change
     --------------------------
     On Jan. 1, 2001, NS Rail adopted Statement of Financial Accounting
     Standards (SFAS)
     No. 133, "Accounting for Derivative Instruments and Hedging
     Activities", as amended by SFAS No. 138, "Accounting for Certain
     Derivative Instruments and Certain Hedging Activities."  The
     Statements establish accounting and reporting standards for
     derivative instruments and hedging activities, requiring that all
     derivatives be recognized in the financial statements as either
     assets or liabilities and that they be measured at fair value.  NS
     Rail recognized a $5 million asset related to interest rate swaps and
     recorded a $5 million increase in long-term debt as of
     Jan. 1, 2001, as a result of adopting provisions of SFAS 133 and 138.

     Changes in fair value are recorded as adjustments to the assets or
     liabilities being hedged, in "Other comprehensive income," or in
     current earnings, depending on whether the derivative is designated
     and qualifies for hedge accounting and the type of hedge transaction
     represented.  For qualifying fair-value hedge transactions (those in
     which the particular risk being hedged is the exposure to changes in
     the fair value of an asset or a liability, or an identified portion
     thereof), changes in the fair values of derivative instruments are
     reflected as adjustments to the carrying amounts of the hedged assets
     or liabilities.  Changes in fair values of the derivative instruments
     that do not offset changes in the fair values of the hedged assets or
     liabilities are reflected in current earnings.  For qualifying cash-
     flow hedge transactions (those in which the particular risk being
     hedged is the exposure to the variability of cash flows related to
     variable rate
                                     9

Item 1.   Financial Statements.  (continued)
------    --------------------

     assets, liabilities, or forecasted transactions), changes in the fair
     values of derivative instruments are reported in "Other comprehensive
     income" to the extent they offset changes in the cash flows related
     to the variable asset, liability, or forecasted transaction.  Any
     difference is reported in current period earnings.  Gains and losses
     on derivative instruments that are reported in "Other comprehensive
     income" are reclassified in earnings in the periods in which earnings
     are impacted by the hedged item.

     Market Risks and Hedging Activities
     -----------------------------------
     NS Rail manages its overall exposure to fluctuations in interest
     rates by issuing both fixed and floating-rate debt instruments, and
     by entering into interest rate hedging transactions on a limited
     basis.  NS Rail had $273 million, or 28.9 percent, and $301 million,
     or 31.5 percent, of its fixed-rate debt portfolio hedged at
     March 31, 2001 and March 31, 2000, respectively, using interest rate
     swaps that qualify for and are designated as fair-value hedge
     transactions.  These swaps have been effective in hedging the changes
     in fair value of the related debt, and accordingly, there has been no
     impact on earnings resulting from these derivative transactions.

     At March 31, 2001, "Other assets" on NS Rail's Consolidated Balance
     Sheet included a $10 million asset related to interest-rate swaps and
     "Long-term debt" included a corresponding $10 million increase.  Fair
     values were determined based upon the present value of expected
     future cash flows discounted at the appropriate implied spot rate
     from the swap rate yield curve.  Fair value adjustments are noncash
     transactions, and accordingly, were excluded from the Consolidated
     Statement of Cash Flows.

     During April 2001, NS Rail began a program, as approved by the NS
     Board of Directors, to hedge a portion of its diesel fuel
     consumption.  The program is designed to assist in the management of
     aggregate risk exposure to fuel price fluctuations through the use of
     one or more types of derivative instruments.  During April 2001, NS
     Rail began to implement the program by entering into swap and call
     option transactions.  NS Rail's management has identified these
     transactions as cash-flow hedges and expects them to qualify for
     hedge accounting treatment.

6.   Comprehensive Income


</TABLE>
<TABLE>
     NS Rail's total comprehensive income was as follows:

<CAPTION>
                                             Three Months Ended
                                                March 31,
                                             ------------------
                                             2001        2000
                                             ----        ----
                                               ($ in millions)

     <S>                                     <C>         <C>
     Net income (loss)                       $  62       $ (30)
     Other comprehensive income (loss)          46         (84)
                                             -----       -----
        Total comprehensive
         income (loss)                       $ 108       $(114)
                                             =====       =====
</TABLE>

     For NS Rail, "Other comprehensive income (loss)" is the unrealized
     gains and losses on certain investments in debt and equity securities,
     principally NS common stock.

                                    10

Item 2.   Management's Discussion and Analysis of Financial Condition
------    -----------------------------------------------------------
          and Results of Operations.
          -------------------------

             NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
       (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
        Management's Discussion and Analysis of Financial Condition
                         and Results of Operations

RESULTS OF OPERATIONS

Net Income
----------
Net income was $62 million in the first quarter of 2001, compared with
a net loss of $30 million in the first quarter of last year.  Results
in 2000 included $62 million of after-tax costs related to actions
taken to reduce the size of the work force (see Note 3).  Excluding
the effects of last year's work-force reduction costs, net income
increased $30 million, or 94 percent, principally due to higher income
from railway operations.

Railway Operating Revenues
--------------------------
<TABLE>
First-quarter railway operating revenues were $1.5 billion in 2001, up
$30 million, or 2 percent, compared with last year.  As shown in the
following table, the increase was attributable to a favorable revenue
per unit/mix variance.

<CAPTION>
                                        First Quarter
                                        2001 vs. 2000
                                     Increase (Decrease)
                                     ------------------
                                      ($ in millions)

     <S>                                   <C>
     Traffic volume (carloads)             $ (21)
     Revenue per unit/mix                     51
                                           ------
                                           $  30
                                           ======
</TABLE>

<TABLE>
Revenues and carloads for the commodity groups were as follows (prior
year data has been reclassified to conform to the current
presentation):

<CAPTION>
                                   Revenues                      Carloads
                              ---------------------         -------------------
<CAPTION>
                                  First Quarter                First Quarter
                                2001         2000             2001        2000
                                ----         ----             ----        ----
                                ($ in millions)               (in thousands)

<S>                             <C>          <C>              <C>         <C>
Coal                            $  393       $  347           439         422
General merchandise:
  Automotive                       214          241           152         183
  Chemicals                        188          185           107         114
  Metals/construction              165          175           166         191
  Paper/clay/forest                154          155           117         126
  Agr./consumer prod./govt.        150          159           130         134
                                ------       ------         -----       -----
General merchandise                871          915           672         748
Intermodal                         238          210           543         508
                                ------       ------         -----       -----
      Total                     $1,502       $1,472         1,654       1,678
                                ======       ======         =====       =====
</TABLE>

                                    11

Item 2.   Management's Discussion and Analysis of Financial Condition
------    -----------------------------------------------------------
          and Results of Operations.  (continued)
          -------------------------

Coal
----
Coal revenues increased $46 million, or 13 percent, in the first quarter,
compared with the first quarter of last year.  Total tonnage handled
increased 6 percent, due to higher utility coal volume that was somewhat
offset by lower volume for export coal and domestic metallurgical coal,
coke and iron ore.  Utility coal volume benefited from increased demand
for electricity and diminished utility stockpiles, coupled with high
natural gas prices and a lack of excess nuclear generation capacity.  The
decline in export tonnage resulted, in part, from the strong domestic
utility demand, which drew tonnage that would otherwise be bound for
export.  Coal revenue per unit increased 9 percent, reflecting higher
rates, longer length-of-haul and improved loading efficiency that resulted
in more tons per car.

In the near term, coal revenues are expected to continue to benefit from
increased demand for electricity and depleted utility stockpiles.

General Merchandise
-------------------
General merchandise revenues decreased $44 million, or 5 percent, in the
first quarter, compared with the same period last year.  Traffic volume
(carloads) declined 10 percent, as all commodity groups posted decreases.
Automotive traffic volume was 17 percent lower, reflecting reduced
production in the face of a slowing economy.  Metals and construction
traffic volume declined 13 percent, principally due to the effects of the
automotive slowdown and continued weakness in the steel industry.  Paper,
clay and forest products traffic volume decreased 7 percent, largely due
to production cutbacks.  Chemicals traffic volume was 6 percent lower,
reflecting reduced demand.  General merchandise revenue per unit
increased, a result of improvements for all commodity groups except the
agriculture, consumer products and government group.  The improvements
reflected higher rates and favorable changes in the mix of traffic within
some of the groups.

General merchandise revenues are expected to continue to post year-over-
year declines, absent a turnaround in the economic climate.

Intermodal
----------
First-quarter intermodal revenues increased $28 million, or 13 percent,
compared with the first quarter of last year, due to higher traffic volume
and increased revenue per unit.  Traffic volume benefited from new
domestic container business and strong international shipments early in
the quarter.  However, the effects of a slowing economy tempered these
gains.  Premium business and Triple Crown Services volumes were flat,
reflecting weak economic conditions.

Intermodal revenues are expected to continue to show growth, supported by
new business and facility improvements; however, continued softness in the
economy could temper this positive outlook.

Railway Operating Expenses
--------------------------
Railway operating expenses were $1.35 billion in the first quarter of
2001, down $128 million, or 9 percent, compared with the same period of
last year.  Expenses in 2000 included $101 million of work-force reduction
costs (see Note 3); excluding these costs, 2001 expenses were down $27
million, or 2 percent.  The decline was largely due to lower expenses that
resulted from the reduced size of the work force.

"Compensation and benefits" expense decreased $156 million, or 28 percent,
excluding the effects of the work-force reduction costs in the first
quarter of 2000.  The decline was primarily due to the effects of the
management fee charged by NS (see Note 4), and lower wages that resulted
from last year's work-force reductions.  These decreases were somewhat
offset by higher wage rates and benefit costs for union employees and a
lower pension credit.
                                    12

Item 2.   Management's Discussion and Analysis of Financial Condition
------    -----------------------------------------------------------
          and Results of Operations.  (continued)
          -------------------------

"Materials, services and rents" increased $142 million, or 41 percent, in
the first quarter of 2001, principally due to the effects of the
management fee.  Higher intermodal volume-related purchased services and
higher materials expenses were largely offset by lower equipment rents.

"Conrail rents and services" decreased $14 million, or 11 percent,
reflecting lower costs in the Shared Asset Areas and lower expenses for
the rental of Conrail equipment.

"Diesel fuel" expenses increased $2 million, or 2 percent, due to a 7
percent rise in the average price per gallon that was partially offset by
a 5 percent decline in consumption.

"Casualties and other claims" expenses increased $5 million, or 16 percent,
principally due to adverse claims development.

"Other" expense decreased $8 million, or 10 percent, primarily due to the
effects of the management fee charged by NS.

The railway operating ratio was 89.9 percent in the first quarter of 2001,
compared with 93.5 percent in the same period of 2000 (excluding the work-
force reduction costs, which added 6.9 percentage points to the ratio).
The improvement reflected the difference in the mix of traffic (a higher
proportion of coal traffic), coupled with expense reductions.

Other Income (Expense) - Net
----------------------------
"Other income (expense) - net" was an expense of $45 million in the first
quarter of 2001, compared with an expense of $33 million in the first
quarter of 2000.  The increase principally resulted from the sales of
accounts receivable (see Note 4), but was somewhat offset by a $13 million
non-recurring settlement.

CASH PROVIDED BY OPERATING ACTIVITIES, NS Rail's principal source of
liquidity, decreased significantly in the first quarter of 2001, compared
with the same period last year, despite an increase in operating income.
The decline resulted from: (1) higher tax payments, including the
settlement of federal tax years 1995 and 1996; (2) the timing of payments
to Conrail, coupled with the absence of significant one-time receipts that
occurred in 2000; (3) the timing of payroll payments and (4) a litigation
settlement payment.  In addition, last year reflected the absence of bonus
payments.  NS Rail's working capital deficit was $1.0 billion at March 31,
2001.  A working capital deficit is not unusual for NS Rail; it is
expected that NS Rail will continue to generate sufficient cash to meet
its ongoing obligations.  In addition, NS currently has the capability to
issue commercial paper, the proceeds of which could be advanced to NS
Rail, if necessary, to meet its more immediate working capital needs.

CASH USED FOR INVESTING ACTIVITIES increased significantly in the first
quarter of 2001, compared with last year.  The increase resulted from a
63 percent rise in property additions, a result of the purchase of
locomotives versus no such purchase in the first quarter of 2000.

CASH PROVIDED BY FINANCING ACTIVITIES in the first quarter of 2001
included $174 million of proceeds from the sale of equipment trust
certificates.  In addition, it reflected a net increase in indebtedness to
PRR, compared with a net decrease in the first quarter of 2000.

LABOR AGREEMENTS

Substantially all of NS Rail's employees are covered by collective
bargaining agreements with 15 different labor unions. These agreements
remain in effect until changed pursuant to the Railway Labor Act.
Moratorium provisions in these agreements permitted NS Rail and the unions
to propose such changes in late 1999; negotiations at the national level
commenced shortly thereafter.  The outcome of these negotiations is
uncertain at this time.  However, an agreement was reached with the


                                    13

Item 2.   Management's Discussion and Analysis of Financial Condition
------    -----------------------------------------------------------
          and Results of Operations.  (continued)
          -------------------------

Brotherhood of Locomotive Engineers, which represents about 5,000
locomotive engineers on NS Rail. In addition, tentative national
agreements (subject to ratification) have been reached with the United
Transportation Union, which represents about 7,500 train service employees
on NS Rail, and with the Brotherhood of Maintenance of Way Employees,
which represents about 4,500 employees on NS Rail.


REQUIRED ACCOUNTING CHANGE

Effective Jan. 1, 2001, NS Rail adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities and Statement of Financial Accounting Standards No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging
Activities."  The adoption of these statements did not have a significant
impact on NS Rail for the first quarter of 2001 (see Note 5).

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements that are based
on current expectations, estimates and projections.  Such forward-looking
statements reflect Management's good-faith evaluation of information
currently available.  However, because such statements are based upon, and
therefore can be influenced by, a number of external variables over which
Management has no, or incomplete, control, they are not, and should not be
read as being, guarantees of future performance or of actual future
results; nor will they necessarily prove to be accurate indications of the
times at or by which any such performance or result will be achieved.
Accordingly, actual outcomes and results may differ materially from those
expressed in such forward-looking statements.  This caveat has particular
importance in the context of any such statements that relate to the
addition of new business and the ability to reduce expenses.
                                    14

Item 3.   Quantitative and Qualitative Disclosures about Market Risks.
------    -----------------------------------------------------------

          There has been no material change to the disclosures made
          under the heading "Market Risks and Hedging Activities" on
          page 32 of the Company's 2000 Annual Report on Form 10-K.
          Additional information required by this item is included in
          Part I, Item I, "Financial Statements" in Note 5 on page 8.
                                    15

                        PART II.  OTHER INFORMATION
                        ---------------------------

Item 6.   Exhibits and Reports on Form 8-K.
------    --------------------------------

          (b)  Report on Form 8-K

             A report on form 8-K was filed Jan. 23, 2001, advising
             of the declaration of a quarterly dividend by the
             Registrant's parent, Norfolk Southern Corporation (NSC)
             and outlining certain restructuring initiatives, and
             attaching as an exhibit the related press release issued
             by NSC.
                                    16


                                SIGNATURES
                                ----------

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



                                    NORFOLK SOUTHERN RAILWAY COMPANY
                                        ---------------------------------
                                              (Registrant)




Date: May 9, 2001              /s/ Reginald J. Chaney
      -----------              ------------------------------------------
                               Reginald J. Chaney
                               Corporate Secretary (Signature)




Date: May 9, 2001              /s/ John P. Rathbone
      -----------              ------------------------------------------
                               John P. Rathbone
                               Vice President and Controller
                               (Principal Accounting Officer) (Signature)