The chairman of the US Surface Transportation Board has asked the seven Class I railroads that operate in the US to update the board with its long-term staffing plans in light of some shipper complaints about service declines, according to a letter issued May 27.
"Although many shippers have reported that railroads are providing consistent and dependable service, the Board has also received concerning reports from a meaningful number of rail customers of subpar performance, including missed switches, railcars delayed at intermediate yards or interchanges, extended out-of-route movements, and prolonged dwell at origin for some unit train traffic," board Chairman Martin Oberman wrote.Oberman said he recognizes some of the rail service challenges are likely due to workforce reductions related to the pandemic, "but I am also concerned by the extent to which these service issues may be related to or exacerbated by a broader trend of rail labor reductions that has been occurring over the past several years."
The letter requests each railroad provide the board with a detailed description of its preparedness to meet future demand, including the availability of train, yard and maintenance crews, as well as plans and time frames for employees to return to work and any retraining. The letter also requests an update on the availability of equipment resources.
"As part of this update, I am specifically requesting that you also address whether you have any long-term plans, including your hiring plans for 2021 and 2022, to reverse any of the diminishing workforce levels, which have resulted from your strategies in recent years," Oberman said.
Employment figures at each of the seven Class I railroads have trended downward in recent years, according to data collected by the board.
For example, Omaha, Nebraska-based Union Pacific reported 32,109 workers in all categories as of mid-April, the most recent month for which data is posted on the STB's website. The employment figure was down 9.6% from April 2020, and down 23.5% from April 2019.
Norfolk, Virginia-based Norfolk Southern showed a similar trend. In mid-April 2021, the railroad reported 18,333 workers in all categories, down 11.9% from April 2020 and down 28.1% from April 2019.
In fact, all seven Class I railroads showed a decline in workers in April 2021 from April 2020, according to the STB data.
In its most recent quarterly filing with the US Securities and Exchange Commission, UP stated that its compensation and benefits expenses decreased 3% in the first quarter of 2021 compared to the year-ago quarter due to productivity initiatives and declines in carload volumes.
Norfolk Southern's most recent 10-Q filing also cited productivity gains, adding that its Q1 operating expenses decreased "as operational efficiency improvements resulted in reduced employment levels."
The Association of American Railroads did not respond to a request for comment.
In addition to UP and NS, the other Class I railroads that operate in the US are Fort Worth, Texas-based BSNF; Jacksonville, Florida-based CSX; Calgary-based Canadian Pacific; Montreal-based Canadian National; and Kansas City, Missouri-based Kansas City Southern.
Class I railroads are the largest that operate in the US, and meet the qualification by having more than $500 million in annual revenue, although this will rise to $900 million on June 4 per a recent rulemaking by the board.
