So, how's that PSR working out?

With PSR the industry has -

Laid off a third of it's work force.
Parked hundreds of locomotives.
Closed yards.
Cut back maintenance.
All in the name of pleasing Wall Street.

So now what do we have?

Trains waiting for crews to come rested.
Trains waiting on power.
Trains tied down because they can't get into/through congested yards.
Embargo's on some service lanes.
An industry that can't handle an upswing in the economy and is on the verge of meltdown. One of the economic blogs I follow has covered this recently -

https://wolfstreet.com/2021/07/22/after ... shipments/

With shippers up in arms there's talk of congress launching an investigation into problems in the industry tied to PSR. Heck, there's even talk of bring back more regulation of the industry. "Self inflected wounds" is what I called it in another post.

Yup, this really worked out well just like others and I predicted.

@RRspatch You forgot to mention that some railroads are also trying to scare away carload traffic in favor of intermodal.

Yes it seems PSR hasn’t worked out very well at all, at least for Norfolk Southern which is getting worse by the day. It’s almost unimaginable to see just how far they have fallen. Up until that new CEO took over they were actually doing very well, and they were picking up a fair bit of customers when Hunter Harrison first started PSR with CSX, and that scared away many people.

Depends on how you define success.

If operating costs are down, and revenues are up, it's a success.

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eolesen wrote: ↑Fri Jul 23, 2021 5:20 pm Depends on how you define success.

If operating costs are down, and revenues are up, it's a success.

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All the above "success" is making railroad investors wealthy in the short term. Part of the PSR model involves selling off everything which isn't nailed down in order to show profit. The problem is that if the asset is needed again, then a replacement will need to be purchased. This will certainly be for more than the old one was sold for.

Secondly, much of the country's economy depends on rail transportation. Some of the companies dependent on this transportation are rather large organizations. They also expend lots on lobbying, just as the railroads do. How will all of this PSR "success" really be if regulation is again implemented? What if the mega system class ones are split up like Ma Bell to increase competition?

It's been demonstrated over and over (apparently with nothing learned): let the pendulum swing too far in one direction and when it reaches its limit it's going to swing too far in the opposite direction, prompting outcries that the resulting regulation is poorly thought out, overreaching, and counterproductive -- which will probably be true -- but it's too late to stop the pendulum.

Yeah, whatever guys. I get that the employees hate PSR. Foamers hate PSR. Some shippers probably hate it. But there are others who like it.

Continue to grind your axes all you want, but for all the noise around reregulation and breaking up the larger Class 1's is just that -- noise.

The status quo from the 30 years post-Staggers was broken with PSR, and railroads are not only profitable but investment worthy.

"Selling off everything not nailed down" is nothing but hyperbole and sour grapes, mainly from people impacted by site closures or who found out their gravy train of overtime got annulled.

Flame away, guys. All you've got is complaints about how your world changed, but the numbers really do tell a much different story. Those long term benefits are why almost every railroad not run by Buffett and a bunch of roads who were direct competitors of Hunter Harrison's properties have all embraced PSR in some form or fashion.

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Considering how my "ties to the industry" are that of an investor, no longer being a "foamer", employee, or even an Amtrak rider (not a "never again" but a "not going out of my way to ride"), I'm with Mr. Olesen all the way. My participation at this site is that so long as I have industry knowledge, coupled with my historical perception, I want to share with those here at the site - while I still can.

Now what will be interesting to observe is how the industry handles the post-COVID recovery. Are there willing hands to hire on (sure pays better than does an Amazon warehouse - whoops, "Fulfillment Center")? Articles in The Journal suggest otherwise. Can the "dead" engines that all roads have a slew of (and hardly receiving the TLC that the airlines are required to give their stored aircraft) be reliable and roadworthy again?

Coupled with the maritime shipping crisis (I've been following m/v Ever Given at its own topic recognizing that potential loss of TEU capacity if after a more complete survey the vessel is found to be unseaworthy) that will eventually cause a "pile up" of "Spaceman Jeff's junk" on the docks, how many wailing little kids will be looking at "Rain Checks" in their Xmas stockings?

Finally, I've never once done business with "Spaceman Jeff"; not a boycott, just no reason.

Another opinion article on PSR from Railway Age (not Trains nor Railfan and Railroader mind you). Lots of questions being asked now about PSR and it's effects of the industry.

https://www.railwayage.com/freight/psr- ... nest-here/

About the author:

Matt Parker is a locomotive engineer and serves as Chairman of the Nevada State Legislative Board for the Brotherhood of Locomotive Engineers and Trainmen.

Let's be honest. I'm sure that his union's position wouldn't at all be influenced by a loss of members and dues income....

eolesen wrote: ↑Thu Jul 29, 2021 5:56 am About the author:

Matt Parker is a locomotive engineer and serves as Chairman of the Nevada State Legislative Board for the Brotherhood of Locomotive Engineers and Trainmen.

Let's be honest. I'm sure that his union's position wouldn't at all be influenced by a loss of members and dues income....

Mr Parker's union position certainly is pertinent in the context of this opinion piece. His locomotive engineer perspective however, with his direct experience of PSR seems germane to this discussion.
"Trains being parked out on line for extended periods," creating "terminal congestion." "Attempting to process trains exceeding 10,000 feet through terminals where the maximum capacity is 9,000 feet," which which does not facilitate "expedited movements of cars to their destinations." And " in some cases leaving these customers without knowledge of when trains will actually arrive to serve them." Casting off smaller online customers in the name of "marketizing" etc is only a pivot to growth in a business school lecture hall.
All quotes from Mr Parker.

Shareholder value does not equate (in this context) with efficient operation of railroads and has nothing to do with foamer gratification or lost overtime.

PSR has meant fewer employees, and the unions' main purpose is to keep wages and their membership numbers as high as possible.

Management's job is to run the railroad spending the least amount of money and the fewest employees possible.

Implementation of PSR didn't modify any CBA as far as I know. Maybe if the unions had come up with alternative workrules or scope relief, PSR wouldn't have been so appealing...

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This Pandemic PSR scrutiny is yet another vehicle and point of clash in the long-term politics between market concentration within the rail shipping community as well as rail labor and the railroad industry. And, of course, that is important. But, realistically, beyond the international steamship lines being under scrutiny as well, other modes, carriers, and operations within our supply chains are experiencing the same issues and results as the railroads moving through this pandemic. I would argue, as well, that to some degree the same larger-than-railroads issues drive their behavior, too, not unlike what has been ascribed to PSR, just not the same political dynamic. I remain optimistic, but there's always risk when the railroad industry is singled out in this way and that's not necessarily a good thing.

I think that Mr. EOlsen is trying to be deliberately contrary and invoke a reaction. I have seen the railroad asset disposal site with locomotives, freight cars, and other equipment sold off. I've seen trains held for lack of power when dozens of newish units (AC units, not 40-50 year old SD40s) are tied up in storage. I've seen local customers that they will go from 5 days a week to 3 days, to 2-1. Olsen my at least pretend to be a big shot investor, but without trains, customers, employees, locomotives, railcars..........., the railroads will be devoid of everything which brings in revenue. The only thing left to do is finish liquidating the rest of their assets.

One last point is that I understand wanting to concentrate on the most profitable business. You are forgetting about one key aspect. It is called the common carrier obligation. With the "activist" STB, I'm fairly certain that investigation by the DOJ over violations of interstate commerce laws is underway. I also envision the folks from Jacksonville, Atlanta, Omaha. Calgary, and Montreal having to testify sooner or later. If the STB is very concerned over PSR results, it makes me doubt that a disgruntled rail worker is just "grinding an ax'.

Nah, not a investor but a interested Observer.

PSR has been in place for over 10 years between all the various railroads employing its concepts.

If you really think the STB is going to suddenly get involved, well, that train appears to have left the station several years ago so to speak...

STB has been making more noises about reduced service. As I've said, and you've eschewed, PSR is not a sustainable business plan. It is about downsizing. If it was working, then there wouldn't be the logistical crisis which exists. If there is traffic to be moved, then why are there hundreds of locomotives mothballed? Why aren't they doing something to try and retain help? Railroaders don't qualify for the extra $$$$ for sitting on the couch, since our unemployment is through Railroad Retirement Board. As many have stated, the carriers have not been particularly friendly places to work. Before PSR they were trying programs to make the career path more hospitable by having rest days for spare guys, for example. That means extra men, which equals extra expense. Now the people who are left are expected to work endlessly every hour allowed by the hours of service. To make matters worse, the have instituted draconian attendance policies. My carrier only lets someone off for a single sick day per month. Any more result in medical review and possible discipline . I for example have not taken a sick day in several years. If I caught the flu, and had to miss two days, I'd be considered substandard to the program. How do you propose that new help is enticed to apply under these conditions?

You have been very contrary to the postings of many of us who are living through this. What are your proposals to solving this crisis?