CEOs Say They’re Ready for Traffic Surge

Five of the seven Class I railroads have responded to a letter from federal regulators expressing concern about their ability to handle traffic surges that could follow as the nation rebounds from the COVID-19 pandemic-induced economic downturn.

The carriers sought to assure the U.S. Surface Transportation Board and the Federal Railroad Administration that they are prepared to handle any traffic surges that may occur, saying they have sufficient personnel and equipment to handle rising volume.

Norfolk Southern CEO James Squires said in his letter that NS adjusted benefits for union members during the pandemic and that train and engine employees have agreed to return sooner than the standard 15-day call back.

Squires said NS has recalled 550 train and engine employees with a net increase of 217 such employees and a furlough return rate of 67 percent.

“Our future success in recalling crews could be affected by a significant resurgence of the virus or because of other factors beyond our control,” he wrote in his letter, which added that NS has begun a training class for new hires in July and plans to launch another training class.

NS does not anticipate needing to remove any of its 270 locomotives or 15,500 railcars now in storage in order to meet traffic demands.

But Squires said those assets are available if needed and that NS has “engaged in an aggressive campaign to meet with customers” to prepare to meet their needs.

CSX CEO James Foote in his letter primarily focused on service metrics to show that the carrier is doing well.

He said velocity and dwell “remain consistent with our historically strong 2019 levels, and our broader array of service metrics have been returning to pre-pandemic levels.”

CSX has recalled about 80 percent of its furloughed employees, and the percentage of locomotives in storage has dropped from 30 percent at the peak of the pandemic to 9 percent.

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