Staggers Act - A Revisit

Moving the lens from a wider to narrower focus when it comes to where we currently find ourselves, begins with our competitive position within a "flatter" world demanding greater "land, labor, and capital" productivity; how Wall Street overlaps Main Street with our aging population expecting continued standards of living in a free-market economy; the ability of government to not only regulate but also promote transportation including amongst modes within the industry with risk of less-than-optimal results arising from a fractured approach; most important legacy of 20th century regulation unsolved by deregulation of railroad private infrastructure informing a capital-intense, leveraged industry up against less capital-intense competitors using public infrastructure flexibly and able to innovate more quickly as possibilities accelerate; consequential rail market challenges including cross-subsidization amongst those served; and, ends with the substantial impact of a 100-year pandemic on a beneficial, not uncommon efficiency-driven operating philosophy also found elsewhere in our supply chains leading to common labor issues, though of greater impact on rail given quality-of-work-and-life-issues and skills-requirements, and, consequently, first-mile-last-mile-service.

So, hopefully the STB will move carefully with precision for what I see is a somewhat delicate system in the long-run that otherwise could provide unintended consequences working against what any narrow interest might be seeking. I think they will. And, it was interesting that CSX's Jim Foote dropped the 1-man crew issue within a testy exchange at the STB hearing after having recently publicly acknowledged and pledged to address the industry's dysfunctional relationship with organized labor. So, to Engineer Spike's comments, with 1-man crews one of a few strategic elements playing in the bigger picture, perhaps there will be a way forward that will balance all constituencies and needs while keeping an eye on strategic risks and opportunities, a "grand bargain", so to speak, as I think has occurred at past important junctures, though, perhaps, with labor needing more assuaging this time around.

Engineer Spike wrote: ↑Wed Apr 27, 2022 1:59 pm ...The rub is the fact that the crew shortage has been manufactured...

Leaving aside the PSR contribution to the current situation, the genesis of the current shortage is the tried and true practice of railroads furloughing crafts to weather business turn-downs and delaying hiring until it is too late. This is nothing new (and should be filed as an example under the definition of insanity)... many saw the coming storm as the furloughs were happening, it was just the magnitude of the storm that was literally unpredictable. Let's face it, this time WAS different: recalls were hampered by unusually high government support being provided the unemployed, complexities of social distancing, (aggravated by the politicization of mask-wearing and COVID shots) and COVID itself, on top of a strong rebound in employment and the emergence of an increasingly "picky" workforce that doesn't favor the railroad lifestyle. Labor agreements favor furloughs to protect senior workers and don't offer much flexibility to respond nimbly. The responsibility for that should not be shouldered solely by the railroads.

OK, all that said... assuming we all agree that employment cyclicality is bad and furloughs started this mess (again, let's leave PSR out of this), what are some ideas to minimize furloughs in the future that may be acceptable to both sides of the table? (Just paying someone to sit at home is not going to fly, just as I can't imagine labor agreeing to those with seniority taking a cut in hours in order to keep less senior co-workers on the active roster.) CSX employed reserve boards, but to what positive effect?

Worthwhile read for those who have access to today's Bill Stephens' Trains Newswire interview with past NS CEO Squires that goes to a "systems" view of where we find ourselves including, germane to this thread, Class 1 railroad necessity, challenge and consequences arising from right-sizing resources to demand.

Across the interrelated constituencies of management, shippers, labor, government, and owners/investors I think in this window of time there's some shared motivation for industry growth and financial health as well as some pressure arising from Covid et. al. with the necessary elements going to and getting to reliability and efficiency, and any tension between the two, in play.

In this light and at this time, to the possibility of a "grand bargain" arising from shared motivation, it's going to have to involve technological capabilities at some near(ing) point including in the most impactful form affecting crew size/deployment and, perhaps, to those that could increase labor flexibility in exchange for some mix of improved wage/benefit, productivity/performance sharing, quality-of-life/work and, perhaps, employment stability (possibly including in numbers of employed for some period of time) moving forward.

Cowford wrote: ↑Sat Apr 30, 2022 7:11 pm

Engineer Spike wrote: ↑Wed Apr 27, 2022 1:59 pm ...The rub is the fact that the crew shortage has been manufactured...

Leaving aside the PSR contribution to the current situation, the genesis of the current shortage is the tried and true practice of railroads furloughing crafts to weather business turn-downs and delaying hiring until it is too late. This is nothing new (and should be filed as an example under the definition of insanity)... many saw the coming storm as the furloughs were happening, it was just the magnitude of the storm that was literally unpredictable. Let's face it, this time WAS different: recalls were hampered by unusually high government support being provided the unemployed, complexities of social distancing, (aggravated by the politicization of mask-wearing and COVID shots) and COVID itself, on top of a strong rebound in employment and the emergence of an increasingly "picky" workforce that doesn't favor the railroad lifestyle. Labor agreements favor furloughs to protect senior workers and don't offer much flexibility to respond nimbly. The responsibility for that should not be shouldered solely by the railroads.

OK, all that said... assuming we all agree that employment cyclicality is bad and furloughs started this mess (again, let's leave PSR out of this), what are some ideas to minimize furloughs in the future that may be acceptable to both sides of the table? (Just paying someone to sit at home is not going to fly, just as I can't imagine labor agreeing to those with seniority taking a cut in hours in order to keep less senior co-workers on the active roster.) CSX employed reserve boards, but to what positive effect?

Having been in the industry for 25 years, furloughs were personally experienced a few times. This time things are different. First, the railroads have played hardball over the last few contracts. Many of the junior employees who get cut really don't have much invested in RRB.We had been paid a premium for giving up a normal lifestyle, in order to be available at any time. Why stay when one can now expect a comparable compensation elsewhere, and also have a normal life?

Besides the lack of staying above the normal pay rates, the railroads have become much more hostile toward the employees. I believe that the aim is at severing employment without paying buyouts as used in past practice. They use tactics like writing up an employee for not saying "over" at the end of the 265th. out of 631 radio transmissions all day on a yard job. A few more such violations move the employee up the discipline process. Eventually this employee gets marked as an "at risk" employee. He might get dismissed, or given a last chance. A last chance allows the employee to still work, but he may be dismissed at the will of the company, without any protection from the union. This basically results in the employee becoming a de facto at will employee.

With the above situation, they just can't keep help. It seems like they are perpetually hiring. Many of the new guys just don't stay. They get a taste of what's going on, then run for the hills. Some long time employees are just sticking it out. Others are making other contingency plans. One guy who was a contractor before the railroad has been buying up cheap multi family houses in the city, then rehabbing them for rental properties. Another has started a tree surgeon business. One friend who was raised on a farm has started contract haying and harvesting. With my logistics background, my goal is to do freight brokering and maybe setting up a motor carrier.

Gilbert B Norman wrote: ↑Thu Nov 05, 2020 8:15 am

Engineer Spike wrote: ↑Wed Nov 04, 2020 2:42 pm The article is making a political statement about deregulation.

Spike, the cited material is OPINION. Sorry if I did not make that adequately clear when presenting such.

I don't think that I was very clear. As was stated by other posters, I believe that by making railroads worthy investments made them a target for hostile takeovers and hedge funds like Mr. Ackman's. I sure do believe in free enterprise. Like every other liberty comes responsibility. There has to be a middle ground between profits and responsibility. As a quasi public utility, the railroads have to consider both obligations.

Engineer Spike wrote:There has to be a middle ground between profits and responsibility. As a quasi public utility, the railroads have to consider both obligations.

Quasi public utility? This isn't socialist Europe or Asia.

Sent from my SM-G981U using Tapatalk

Focusing on regulating PSR/the railroads to combat Wall Street raiders is looking at the issue through a microscope, when the naked eye alone should be able to show you what's wrong.

Keyword from Mr. Engineer Spike's post: hedgefunds.
They have been raiding business besides just the railroad for decades - they've done the same thing to Sears and other retailers time and time again. A lot of these hedge fund managers are buddies with big bank managers - they get a HUGE loan from said banks, one they wouldn't get otherwise, saying the loan is needed to buy a company and "invest" in it. They usually pocket the money, and in order to pay the loan back, they will cut corners in the company they purchased, and sell off its assets. You saw it with Sears when they sold off their brands like Craftsman, and you're seeing it now with railroads selling all their fleet inventory and yard properties. Where do you think that money is going?

A retailer, however, generally doesn't have a ton of businesses and industries relying on them like the railroads. You can regulate the individual industry again, which will probably screw over the shortlines/smaller railroads even more, or you can try to do something about the hedge funds and their legal lootings. Maybe the way the Federal Reserve works? But that would require politicians going after their financial backers...

One decent step would be to break up some of the large Class I's; that way, if a Class I has terrible service like they have been having recently, an entire region won't have to suffer with and deal with it; it would also allow railroads to continue making profits while not attracting Wall Street sharks

As an employee I watched how a certain Mr. Ed destroyed Sears. One major store got a newspaper story about how it was losing a lot of money and had to close. Except that it wasn't. Store closed by Ed, space still unused years later because the community opposes his plan. My store was closed, took about 3 years before maybe half the space was redeveloped. Before it closed, we were starved of merchandise and staff. Day after we were told, tractor trailers full of things we needed started pouring in - with closing sale prices higher than normal. They cut our commissions, already miniscule, for the closing sale.

It's beyond disgusting what some of these owners, retail or rail, have done. The nonsense down south, where railroads claim they need Amtrak to pay up to restore certain lines - but those railroads, instead of investing in improved track, did stock buybacks for far more money. Some RR's are worse than others, but at a time when we need true net investment, we get this nonsense.

As to breaking up large RR's, instead we've got at least one huge merger still underway. They don't need to merge - it's just an excuse to cut labor costs.

Saw this earlier and... it's at the point where some regulation needs to happen.

https://www.railwayage.com/regulatory/i ... e-leaving/

Editor’s Note: The Surface Transportation Board is conducting an in-person hearing April 26-27 (EP 770, Urgent Issues in Freight Rail Service) with the CEOs of the “Big Four” Class I railroads—BNSF, CSX, Norfolk Southern and Union Pacific—on service problems. Class I locomotive engineer Matthew DeLay, without identifying his employer, sent this letter to STB Chairman Marty Oberman on April 19 as commentary for the hearing. It was entered into the Public Record by the STB Office of Proceedings on April 19. It is reproduced here in its entirety, with only minor edits. The opinions expressed here are those of Mr. DeLay, not Railway Age. – William C. Vantuono

I suggest reading the entire entry. It ties a lot of things together -- from PSR to constant freight derailments, staff (mis)management, equipment and facility mismanagement...

I'm now thinking of what actual regulations we should be having.

What merger is that? Is it the CSX-KCS merger? I thought that went through already.

In any case, Mr. Ed lost a lot of money after Sears - I believe his net worth tanked (obviously since Sears' did as well), and the company went under due to his horrible management - how the free market is supposed to work. If you do a sh*t job of running a business, you will eventually cause it to close.

But it didn't have to be that way, it was purposely run into the ground. It cost millions of people financial security so a certain Mr. Ed could get some money, as well as made an American icon fade into history...

In my opinion, any new regulations need to be on Wall Street - guarantee any new RR ones would backfire as the Wall Street goons pay off politicians to look the other way, and smaller railroads get put in a chokehold by them. Any time someone says x industry needs to be reeled in, it's usually due to the actions of some Wall Street guys; let's target them directly

Typical government solution: submit some reports and we'll review that over the next six months to a year....

I remember when making airlines report on-time arrival rates was going to end flight delays and cancelations. And then reporting their baggage loss rates was going to end lost baggage... and that list grew & grew to a dozen or so metrics.

I've yet to recall a case where an airline was actually fined or held accountable for poor performance on a government reported metric.

So it will be with the STB and these new reports...

JohnFromJersey wrote: ↑Mon May 09, 2022 3:57 pm What merger is that? Is it the CSX-KCS merger? I thought that went through already.

Nope, the CP/KCS merger decision is still a ways ahead of us. CSX will take over Pan Am formally in a few weeks.

During this crucial time of turbulence, uncertainty and certain change CSX has provided a couple of incisive points when it comes to where we are and what we need to keep in mind moving forward.

The first comes from CEO Jim Foote during the STB's 2/16 hearing on Gulf Coast passenger rail when he stated "it's called a pandemic!", reminding listeners of on-going issues and impact across our entire domestic and global economy created by this 100-year event.

The second comes from EVP Sales & Marketing Kevin Boone during his STB presentation at the very end of the reciprocal switching hearings, laying out how incumbent strategic investment decisions are made in this capital-intensive business and, importantly, demonstrating the negative impact of adding risk to the long-term decision-making equation.

When I see the Wilner opinion piece, amongst others, in Railway Age about CSX CEO Foote's "loss of situational awareness" during a testy exchange with STB member Primus, while a reasonable take on that particular situation perhaps, my take is that much more importantly that charge applies broadly across and should be kept in mind amongst all the players, including Railway Age opinion writers, when considering where we are, how we got here, and where we're going.

Cowford wrote: ↑Sat Apr 30, 2022 7:11 pm

Engineer Spike wrote: ↑Wed Apr 27, 2022 1:59 pm ...The rub is the fact that the crew shortage has been manufactured...

Leaving aside the PSR contribution to the current situation, the genesis of the current shortage is the tried and true practice of railroads furloughing crafts to weather business turn-downs and delaying hiring until it is too late. This is nothing new (and should be filed as an example under the definition of insanity)... many saw the coming storm as the furloughs were happening, it was just the magnitude of the storm that was literally unpredictable. Let's face it, this time WAS different: recalls were hampered by unusually high government support being provided the unemployed, complexities of social distancing, (aggravated by the politicization of mask-wearing and COVID shots) and COVID itself, on top of a strong rebound in employment and the emergence of an increasingly "picky" workforce that doesn't favor the railroad lifestyle. Labor agreements favor furloughs to protect senior workers and don't offer much flexibility to respond nimbly. The responsibility for that should not be shouldered solely by the railroads.

OK, all that said... assuming we all agree that employment cyclicality is bad and furloughs started this mess (again, let's leave PSR out of this), what are some ideas to minimize furloughs in the future that may be acceptable to both sides of the table? (Just paying someone to sit at home is not going to fly, just as I can't imagine labor agreeing to those with seniority taking a cut in hours in order to keep less senior co-workers on the active roster.) CSX employed reserve boards, but to what positive effect?

It goes beyond this. We all know about how the railroad cuts the boards when they have to pay guarantee. Ive been in the industry long enough to know this. I've been a victim of it a few times. This time it is different. It seems like employees get overly severe discipline for relatively minor offenses. Often I have seen employees dismissed for these offenses. After a month or two, the employees is allowed to come back. The stipulation is that the employee must sign a contract that any offense big or small results in dismissal, without the right of appeal. This creates a de facto at will employment. They have been using other tactics to make the job as unappealing as possible. Then they turn around and shrug when the customers, and now the STB ask why they are so short staffed. It seems like for every dozen new hires, maybe two stick it out.

One totally different topic I would like to clear up something which I said earlier in the thread. I stated how deregulation is responsible for PSR. I did not properly explain that I thing that the railroads were given too free a hand. With little oversight, it was prime picking for a hedge fund to come in and do as they please. With more oversight, I don't believe that things would have been allowed to degrade to the present state.