Congress and the Railroads

Memo for ALL the freight carriers: You exist to serve your customers. Without customers and timely delivery of products, the railroads have no reason to exist.

Senator Baldwin of Wisconsin introduced this legislation:

Baldwin offers bill aimed at cutting down on freight rail disruptions

Brief, fair use quotes:

Since May, railroads failed to fulfill about 13 percent of all pickups and deliveries, and 30 percent of railcars didn’t reach their destination within 24 hours of the estimated time of arrival, according to Surface Transportation Board data.

Shippers say that chronic rail service disruptions have reduced the supply of goods available to consumers, driving up prices at the pump and the grocery store.

“In order to build a strong Made in America economy and also lower costs for consumers, we need to ensure our agriculture, energy, and manufacturing businesses have reliable rail service,” Baldwin said in a statement.

Railroads have pushed back on congressional efforts to intervene in the rail system, noting that the Surface Transportation Board is already taking action to better define common carrier rules and enact other changes to minimize service disruptions.

Lawmakers have been paying more attention to freight rail after a contract dispute between rail workers and their employers nearly led to a nationwide strike that would have ravaged the U.S. economy.

Railway Age got a "one pager" of the act.

I haven't seen the text of the bill yet in the Library of Congress.

Can anyone point to a business (other than the government) who is at full staffing right now?

Congress "acting" won't force people who left the workforce to go back into the workforce.

I can't help but wonder if the increasing availability of "free" healthcare in certain states has exacerbated the number of people who've left the workforce. If you don't need full time employment for the insurance, why keep a full time job if you can make ends meet on part time employment?...

Text is available on the senator's web site ...
Press release with link to text: https://www.baldwin.senate.gov/news/pre ... businesses

After reading John's post, I don't think that timely delivery of goods is even on the railroads' radar. With PSR, it is my belief that bulk customers are the only ones which they really are soliciting. This is because of two factors. First, there really aren't any other transportation modes for large bulk shipments unless the customer happens to be near a waterway. Let's just say that this type of customer is more or less captive to rail service. They have to settle of whatever lackluster service the railroads provide. The second point is that a unit train doesn't need much work. The cars don't have to be switched. The power is tied on and a Class 1 brake test is performed..

With all due respect, there's just no evidence that backs your opinion. The Class 1's are pursuing growth and as network businesses recovering, like other transportation businesses, and responding to labor shortages arising from a seismic 100-year unforeseen disruption. I follow the LTL trucking business with its characteristics most-similar to railroads and have seen 1-month network disruptions that take 3-months recovery. Driving by a national carrier's local terminal the other day, 8 inbound loads sitting in their yard untouched.

While bulk traffic is an important part of the equation of how they'll attempt to grow, growth is being pursued in intermodal and, importantly, carload merchandise which has declined due to long-unmet market needs. Within this dynamic the long-term demise of bulk traffic coal can't be understated. And, in terms of timely delivery, all of that UPS, FedEx and LTL traffic handled by the railroads wouldn't exist without it and, interestingly, not a peep of complaint from them in this politically-charged atmosphere.

There's plenty of discussions taking place about penetrating the discretionary market that has been eroded in favor of highway. Among these differing markets and submarkets there's both "timely" and "reliably" characteristics that go to successful solicitation.

You can't blame the railroads labor shortage on the pandemic. They, especially CSX under PSR, were cutting jobs well before that. They used the pandemic to make the cuts deeper and faster as I've explained before when they should have done the opposite.

It was easy to see the situation would be temporary, and they could have used the time to do any number of things. For example, send people to engineer school. Or qualify people on different routes. Or do some track work. They could have retained the new hires by doing this. But they chose to cut. And since the job doesn't really pay well now, they didn't come back and even veteran employees quit to get away from the PSR "more with less" model of operation.

The bottom line is that the railroads broke themselves, they caused their own meltdown, and like Engineer Spike says, all that is left is captive bulk customers.

Which of course is by PSR design.

To reach an accurate, realistic judgement, review where we were at with Covid and its impact upon railroad traffic first half of 2020, how railroads and labor historically behaved during economic downturns before this 100-year pandemic, labor shortages at railroads that never implemented PSR and persist as well in our schools, emergency rooms & hospitals, trucking companies, restaurants, retail stores, etc., as well as the traffic railroads handle, including out your cab windshield.

You can't blame the railroads labor shortage on the pandemic

Not in its entirety but certainly for the biggest part.

It was easy to see the situation would be temporary

Yeah, right, only from your easy chair looking backwards! Having been there all I can say is that statement is laughable (and I'm surprised the cuts were not deeper).

I was there too, out there working and staying in the dirty hotels and sharing rides in dirty crew vans and hot swapping crews with no cleaning of the locomotives like nothing had changed. They had no official policy until like a year later, but they cut jobs right away.

You say my statement is laughable, but CSX kept the same punitive policies for marking off sick for at least six months after everyone else was locked down. They just gave us some stupid letter saying we were essential workers. Now they don't even accept home covid tests. So now if you think you may have covid and mark off, you will get points on attendance for marking off, even with a positive home test. Then they wonder why no one wants to work here.

They totally knew the lockdown was not the new normal, the used a temporary situation to expedite plans they had in place before the pandemic.

While I respect your complaints about working conditions (too bad you didn't get to talk with Joe), your continued griping about certainty during the first half of 2020's tremendous uncertainty and how the railroads simply responded as they always had leading up to all the unknowns coming to pass from a 100-year pandemic is what's laughable. Must be nice to sit in that comfortable backwards-facing armchair, no?

Looking at your employer CSX 2Q20 v. 2Q19 revenue dropped 26% on 20% lower volume with an 11% lower headcount. During that time, across the entire network reduction in T&E productivity paced the reduction in T&E headcount.

My point is they didn't and still don't care about the pandemic, which you are using as an excuse. They used the pandemic to accelerate the PSR agenda that was already happening and went too far.

I get your point but it's as dull as a butter knife.

Looking at the facts, nothing your employer CSX has done is outlying behavior (whether they care or not) vs. the other US Class 1's; historic railroad behavior during economic downturns; and, in the larger sense, what has been experienced in the transportation industry and in our greater economy with the Great Resignation.

CSX T&E cuts specifically attributable to PSR began in 2H17, continued through 2018 & 19, but then the cuts made in 1H2020 came from the severe downturn & uncertainty of Covid with declining T&E productivity pacing the cuts and a negotiated attempt to use temporary reserve boards to hedge for everyone's benefit.

Non-PSR Class 1 BNSF dropped T&E headcount 29% (v. CSX 19%) 6/19 v. 6/20 in response to the severe drop and uncertainty with traffic as a result of Covid.

As traffic came back 2H20 and 2021, including in jagged fashion with disruption occurring across our supply chains and Covid stimulus in play, labor shortages began as T&E did not return from furlough and hiring efforts fell half-short. Continuing from 2021 into 2022 as traffic demands bounced further back, congestion from crew shortage became severe though with new hiring efforts targeted to return T&E headcount back to pre-pandemic levels finally gaining traction. So far, 2023 is looking good, but likely mixed prospects in the race for retention and hiring in light of a number of factors- we'll have to see.

This bears itself out when reviewing the Surface Transportation Board's mid-month employment data reporting, starting with CSX's peak 2017 T&E headcount in June and just before Hunter Harrison's application of PSR principles dug in (% change v. 2017 base): 6/17 9730; 6/18 8360 ((14%)); 6/19 7698 ((21%)); 6/20 6244 ((36%)); 6/21 6675 ((31%)); 1/22 6739 ((31%)); 6/22 7021 ((28%)); 1/23 7631 ((22% ~back to 2019 levels)).

I wouldn't characterize CSX's behavior as "using the pandemic to accelerate the PSR agenda", but, just as they said all along and including measures to boost T&E productivity to emergently push back against the severe congestion arising from T&E shortages across their and other railroads' networks.

Yeah you can't keep beating the PSR Is Bad drum if the cuts were in line with BNSFs cuts...

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QB, I think that you're trying to be a troll. Since the pandemic, they cut jobs and employees to the bone. This is well hashed out in this thread. Where I work, just about all the furloughed employees were called back by the summer of 2000. Only a fraction came back. You can't say that they were sitting home fat dumb and happy on unemployment. This is because many who didn't come back were inelidgible for state unemployment. They had too much railroad time, so they were only entitled to RRB unemployment.

In the last three years, there have been countless classes of trainees. very few stay very long. This begs the question as to why. Maybe it has to do with all the workers who have been sitting home on unemployment. This has created many options where someone can find a job with decent pay and benefits, while having a normal lifestyle. In a jobseeker's job market, the railroads were making it out to the government as if they were almost broke, in reference to the recent national contract. They would not concede on anything. How in today's job market do they expect to attract new employees? I don't really thing that they want to . The next phase it to claim the inability to retain help, forcing single person crews, or even full automation.

As to the reply of "no evidence" on my point about trying to slim down to only captive bulk traffic, I will give you the evidence. I see instances every day where crews are told to skip customer lifts and spots. I know some people at local businesses who can't get cars in.

Nothing I have written justifies that kind of label, though I'm not surprised you would attempt to "go low" since you've done it before without justification. It's not right.

I'm not about to let T&E and other crafts dominate with a narrative beyond their own qualification and experience, which I respect. When you venture into territory you're really not qualified on or try to broad brush the industry with narrow, anecdotal experience it's fair game. Taking your experience that comes from one craft, one carrier, one segment of the network that represents .00143 of the US rail industry to write "that timely delivery isn't even on the railroads' radar" and "with PSR bulk customers are the only ones which they really are soliciting" seriously calls for a response.

The railroads had to make deep cuts in light of Covid's severe uncertainty and drop in traffic . Their response followed historic behavior coming from labor relations up until this point and the cuts could have been deeper but instead they also absorbed some of the hit with T&E productivity falling as well. Even railroad analyst Rick Paterson of Loop Capital, who has been critical of how labor and management have historically treated downturns, was not critical at the time of the railroads' behavior in response to the pandemic's huge impact because he understands how expensive railroads' labor costs are.

Job resignations motivated by dissatisfaction was a large part of the Great Resignation, not only on railroads but across the entire economy. In turn, this lead to severe railroad network disruption across all of the US Class 1's without exception, hence the Democratic "Congress and the Railroads".

Eolesen's post asking "can anyone point to a business...who is at full staffing right now?" was spot on. According to the BLS, 4 million folks/month left their jobs in 2021/22 totaling 48m. 2021 vs. 3.5m in 2019. The American Trucking Association reported an 80,000-driver shortage during the same time, worsened significantly since 2020 as many drivers retired or moved into lower-stress careers. In response organized labor has pointed the finger at carriers saying they cut too deep and added too much work to those remaining. Sound familiar?

No matter what the railroads were thinking pre-pandemic, most importantly they are responding post-pandemic recognizing that they need to improve shipper and labor, ergo government, relationships. We'll see. In the meantime 100,000's of time-sensitive loads continue to move on the railroads with nary a peep from those who are tendering them during this politically-charged atmosphere.