Posts Tagged ‘Association of American Railroads’

Jawboning Intensifies Ahead of Rail Stoppage

September 9, 2022

With a potential national railroad strike and/or lockout a week away, a war of words has ensured in various quarters ahead of the Sept. 16 expiration of a 30-day cooling off period.

The Association of American Railroads said this week that a railroad stoppage could cost the U.S. economy more than $2 billion a day.

In a related development, U.S. Labor Secretary Marty Walsh has joined negotiations being supervised by the National Mediation Board with eight railroad unions that have not yet reached tentative agreements.

One report indicated that Walsh told both sides they should avoid messing with the nation’s fragile economy weeks ahead of elections because neither Congress nor the Biden Administration will like it.

He reportedly warned the two sides that they should not expect Congress to act to head off a railroad stoppage by approving a settlement or extending negotiations.

Five of the 12 railroad labor unions have reached tentative agreements with the National Carriers Conference Committee, which represents railroad management in labor contract negotiations.

The AAR report said a work stoppage would halt more than 7,000 trains a day and “trigger retail product shortages, widespread manufacturing shutdowns, job losses and disruptions to hundreds of thousands of passenger rail customers.”

The $2 billion impact of a work stoppage on the economy was an update of a 1992 Federal Railroad Administration econometric study to quantify the potential effects of a national rail shutdown on employment and economic output.

Railroad executives fear that a work stoppage could lead some shippers to use other modes of transportation to move freight and some of that lost business might not return to the rails.

The AAR report said that Congress might have to intervene to avert a work stoppage if negotiations fail to resolve the matter.

Some industry observers have suggested that as the Sept. 16 deadline approaches, the parties in the negotiations might voluntarily extend the deadline.

The cooling off period by federal law began upon the Aug. 16 release of the recommendations of a presidential emergency board, which was appointed by President Joseph Biden earlier this summer.

The recommendations of the PEB are not binding on the parties to the negotiations.

An analysis published on the website of Railway Age noted that one factor favoring giving negotiations more time is “outside political duress and internal financial pressure on all stakeholders, which serves to refocus reasonable minds and chill wonderfully even the most pugnacious of negotiators.”

The Railway Age report, though, said that the NCCC indicated on Thursday that railroad management is reluctant to extend the negotiating period in light of how five unions agreeing to tentative contract has set a pattern.

Any tentative contract agreements must be ratified by union members.

Union leadership has been hinting that a strike could strain the finances of the unions if they have to pay their members strike benefits that could exceed $12 million a day.

Some union members have been actively calling for a strike and may be underestimating how much it could cost them.

Strike benefits provide at best a fraction of what workers earn through regular wages and benefits.

Unions have told their members recently that during a strike they could expect no more than $100 a day in strike benefits and $1,200 maximum per month.

Strike benefits would not be paid for the first three days of a strike.

A memo sent to members of the SMART Transportation Division said the cost of paying its 37,000 members strike benefits would be more than $3.7 million per day.

SMART-TD leadership warned that strike benefits could be suspended if needed to protect the financial interests of the union.

Union workers who are away from home when a strike begins would face having to make their own arrangements to return home.

If carriers cut off health care benefits during a strike, workers would be faced with doing without health care insurance for the duration of a work stoppage or having to pay thousands of dollars a month to buy insurance at market rates.

In the meantime the website Politico.com said some of the eight unions still at the bargaining table have reached tentative agreements with the NCCC, but those have yet to be announced.

The Politico report said the unions representing locomotive engineers and conductors and the NCCC continue to be at stalemate over certain issues, including following the terms of agreements reached with the NCCC by other unions.

Leaders of T&E unions said their members have “borne the brunt of inept crew management, life-changing attendance policies, and working conditions over the past years that are making it all but impossible for rail carriers to hire and retain operating employees.”

The leaders of the SMART-TD and the Brotherhood of Locomotive Engineers and Trainmen called on Congress to stay out of the dispute.

“We are confident that the rail carriers will move from their current positions and settle with their employees in a fashion that could be ratified,” if Congress remains on the sidelines, the union leadership said.

Rail Freight Up 0.4% in August

September 8, 2022

U.S. Class I railroads handled 1,189,892 carloads in August 2022, a gain of 2.3 percent, or 27,040 carloads when compared with the same month in 2021.

Figures released by the Association of American Railroads showed that during August 2022 the railroads handled 1,335,618 containers and trailers, down 1.2 percent, or 15,856 units, from August 2021.

Combined U.S. carload and intermodal originations last month were 2,525,510, up 0.4 percent, or 11,184 carloads and intermodal units from August 2021.

Eleven of the 20 carload commodity categories tracked by the AAR saw carload gains compared with August 2021.

These included coal, up 17,468 carloads or 5.2 percent; grain, up 12,594 carloads or 14.1 percent; and crushed stone, sand and gravel, up 7,327 carloads or 7.1 percent.

Losing ground were primary metal products, down 6,711 carloads or 14.1 percent; all other carloads, down 4,914 carloads or 15.9 percent; and petroleum and petroleum products, down 3,410 carloads or 6.6 percent.

In a statement, AAR Senior Vice President John T. Gray said there is reason to believe the nation’s economy is on track to stimulate continued improvements in rail volumes.

“To be sure, some traffic categories are doing better than others, just like some sectors of the economy are doing better than others,” Gray said. “Through additional hiring and continued investments, railroads are preparing themselves for growth.”

Rail Freight Traffic in July Was Mixed Picture

August 4, 2022

The good news in the rail traffic report for July is that 10 of the 20 carload commodities tracked by the Association of American Railroads posted gains.

But the other 10 saw declines, which led AAR Senior Vice President John T. Gray to say in a statement that rail traffic for the month was evenly balanced between gains and losses.

“As such, it does not provide definitive evidence regarding the state of the overall economy,” Gray said. “In that respect, it is very similar to most other recent economic indicators.”

U.S. Class I railroads handled 906,903 carloads in July, an increase of 0.2 percent, or 2,213 carloads when compared with July 2021.

That was offset by the traffic of 1,033,906 containers and trailers, which represented a decline of 3 percent, or 32,094 units.

Combined carload and intermodal traffic for the month was 1,940,809, down 1.5  percent, or 29,881 carloads and intermodal units when compared with July 2021.

AAR said commodities that gained ground during July when compared to the same month in 2021 included coal, up 5,588 carloads or 2.2 percent; crushed stone, sand and gravel, up 5,197 carloads or 6.7 percent; and motor vehicles and parts, up 3,726 carloads or 8.2 percent.

Losing ground were primary metal products, down 7,065 carloads or 19.2  percent; all other carloads, down 3,311 carloads or 15.1  percent; and stone, clay and glass products, down 2,202 carloads or 6.7  percent.

FRA Proposes 2-Person Crew Rule

July 28, 2022

The Federal Railroad Administration has proposed requiring that trains have a least two crew members aboard.

The  proposed rule, which is to be published today in the Federal Register, would require at least two crew members for all railroad operations, with exceptions for operations that do not pose significant safety risks to railroad workers, the public or environment.

In a news release, the FRA said the rule would bring uniformity to the industry by replacing a patchwork of state laws regulating train crew size.

The FRA proposal includes requirements for the location of crew members on a moving train, and would ban the operation of some trains with fewer than two crew members from transporting large amounts of certain hazardous materials. 

FRA officials said the rule contains an assessment and annual oversight requirement to ensure that railroads fully consider and address all relevant safety factors associated with using less-than-two-person crews.

The proposed rule was rebuked by the Association of American Railroads as “misguided.”

In a statement the AAR said the FRA considered and rejected a similar two-person crew rule in 2019 after finding the absence  of a safety justification for it.

Freight Traffic Down 3.2% in June

July 7, 2022

U.S. Class I railroads hauled 1,157,555 carloads in June, a decline of 1.5 percent, or 17,970 carloads when compared with the same month in 2021.

The Association of American Railroads said that intermodal traffic this past June was 1,323,119 containers and trailers, a decline of 4.6 percent or 63,483 units compared with June 2021.

Combined U.S. carload and intermodal originations in June 2022 was 2,480,674, a fall of 3.2 percent, or 81,453 carloads and intermodal units compared with the same month last year.

AAR said eight of the 20 carload commodities it tracks posted carload gains in June.

These included crushed stone, sand and gravel, up 7,028 carloads or 7.3 percent; grain, up 4,794 carloads or 4.5 percent; and motor vehicles and parts, up 3,839 carloads or 6.2 percent.

Losing ground were coal, down 10,226 carloads or 3.1 percent; all other carloads, down 7,532 carloads or 23.1 percent; and primary metal products, down 5,388 carloads or 11.6 percent.

Excluding coal, carloads were down 7,744 carloads, or 0.9 percent, in June 2022 from June 2021. Excluding coal and grain, they were down 12,538 carloads, or 1.7 percent.

AAR Senior Vice President John T. Gray said this week that the June traffic report doesn’t indicate whether the economy is on the verge of a recession as many economists are warning.

“Like many other economic indicators today, rail traffic is a mix of red, yellow and green, with some traffic lines, such as automotive, providing generally positive indicators, while others, such as chemicals, being a bit more subdued than they were earlier in the year,” Gray said.

Carload traffic for the first six months of this year was 5,993,917, down 0.1 percent, or 8,823 carloads compared with the first half of 2021.

Intermodal traffic was 6,878,726 intermodal units, down 6.2 percent, or 453,282 containers and trailers.

Total combined U.S. traffic for the first 26 weeks of 2022 was 12,872,643 carloads and intermodal units, a 3.5 percent drop compared with the same period in 2021.

Automotive Traffic Rebounding on Class 1s

June 7, 2022

Automotive traffic on U.S. Class 1 railroads has improved in recent weeks, which may be evidence that the supply chain in the automotive industry is recovering, Trains magazine reported in an analysis posted on its website.

All seven Class 1 systems have posted gains in automotive traffic during the second quarter of 2022 with CSX and Norfolk Southern respectively reporting increases of more than 10 percent since April 1.

The report drew data from the weekly traffic reports issued by the Association of American Railroads.

Automotive traffic has been hindered in the past two years by the effects of the COVID-19 pandemic and a resulting shortage of semiconductor chips installed in new vehicles during the manufacturing process.

The Trains report noted that the rail systems still trail pre-pandemic automotive traffic levels.

The report can be read at https://www.trains.com/trn/news-reviews/news-wire/railroads-automotive-carloads-show-signs-of-improvement-analysis/

Groups Want USDOT to Use IIJA Funds to Help Ease Supply Chain Congestion Problems

May 15, 2022

Organizations representing the transportation, manufacturing and construction industries have asked U.S. Department of Transportation Secretary Pete Buttigieg to use funding in the Infrastructure Investment and Jobs Act to help untangle supply chain congestion.

They sent a letter to Buttigieg requesting that USDOT “dedicate as much as allowable by law in discretionary grants for FY 2022 to support projects that will facilitate and ease the movement of goods.”

The groups want USDOT to use $18 billion for various grant programs over the next five years.

Among the signers of the letter were the Association of American Railroads, and the American Short Line and Regional Railroad Association.

During a Senate hearing earlier this month Buttigieg said the proposed federal year 2023 budget for USDOT includes $36.8 billion in advance appropriations provided by the infrastructure law.

Some Freight Made Gains in April

May 5, 2022

U.S. rail freight traffic in April showed gains but also fell short of what it was in the same month a year ago.

The Association of American Railroads said combined U.S. carload and intermodal originations in April were 2,002,854, a decline of 5.8 percent, or 122,798 carloads and intermodal units when compared with April 2021.

Carload traffic was 919,703 carloads, a fall of 3.4 percent or 31,929 carloads while intermodal traffic was 1,083,151 containers and trailers, a decline of 7.7 percent or 90,869 units.

Eight of the 20 carload commodity categories that AAR tracks saw carload gains compared with April 2021.

These included motor vehicles and parts, up 5,649 carloads or 12 percent; chemicals, up 4,463 carloads or 3.4 percent; and food products, up 1,632 carloads or 6.7 percent.

Losing ground were grain, down 15,817 carloads or 15.2 percent; metallic ores, down 9,070 carloads or 32.5 percent; and petroleum and petroleum products, down 7,670 carloads or 17.3 percent.

Excluding coal, carloads fell by 29,329 carloads, or 4.2 percent, in April 2022. Excluding coal and grain, carloads were down by 13,512 carloads, or 2.3 percent.

“U.S. rail traffic in April had something for everyone,” said AAR Senior Vice President John T. Gray in a statement.  “Optimists can point to autos, chemicals and scrap, all of which had solid gains. Pessimists can point to grain, intermodal and petroleum products, which saw significant declines.”

Gray said in the middle were industrial products, an aggregation of seven key carload categories, which fell slightly in April.

During April intermodal traffic set records. Grain, food, lumber, paper, scrap metal and several other commodity categories exceeded the April 2019 pre-pandemic levels as well as April 2020’s pandemic levels, Gray said.

Total carload traffic for the first four months of 2022 has been 3,906,843 carloads, rising 1.1 percent, or 44,191 carloads, from the previous-year period; and 4,453,049 intermodal units, falling 7.1 percent, or 340,541 containers and trailers.

Total combined U.S. traffic for the first 17 weeks of 2022 was 8,359,892 carloads and intermodal units, a 3.4 percent decline from 2021.

U.S. Rail Freight Traffic Had Mixed March

April 7, 2022

U.S. rail freight traffic was decidedly mixed during March, the Association of American Railroads reported.

Combined U.S. carload and intermodal originations for the month were 2,507,684, a decline of 3 percent or 78,714 carloads and intermodal units when compared with March 2021.

That breaks down to 1,169,546 carloads—up 1.2 percent or 13,456 carloads compared with the same month in 202.

Intermodal traffic for March 2022 was 1,338,138 containers and trailers, a drop of 6.4 percent or 92,170 units compared with last year.

John T. Gray, AAR senior vice president, said chemical carload traffic had its best month ever but grain, petroleum products and papers products posted significant declines.

At the same time Gray said carloads of crushed stone and sand, food products, lumber, and motor vehicles “were higher than they’ve been in months.”

Calling these trend “conflicting,” Gray said they reflect “an economy with a good deal of directional uncertainty; uncertainty that needs resolution before its full potential can be realized.”

The AAR figures showed that in March nine of the 20 carload commodity categories that it tracks posted gains compared with March 2021.

These included chemicals, up 18,291 carloads or 11.7 percent; coal, up 16,637 carloads or 5.4 percent; and crushed stone, sand and gravel, up 7,974 carloads or 8.5 percent.

Losing ground were grain, down 13,839 carloads or 10.8 percent; petroleum and petroleum products, down 9,033 carloads or 16.5 percent; and all other carloads, down 4,459 carloads or 14.6 percent.

Excluding coal, carloads fell by 3,181, or 0.4 percent. Excluding coal and grain, carloads were up by 10,658, or 1.5 percent.

Total U.S. carload traffic for the first three months of 2022 was 2,987,140, a gain of 2.6 percent, or 76,120 carloads compared with the first three months of 2021.

Railroads handled 3,369,898 intermodal units, a decline of 6.9 percent or 249,672 containers and trailers.

Total combined traffic for the first 13 weeks of 2022 was 6,357,038 carloads and intermodal units, a 2.7 percent decline from 2021.

February U.S. Rail Traffic up 5.7 Percent

March 3, 2022

February U.S. railroad freight traffic posted a 5.7 percent gain, the Association of American Railroads said this week.

The combined U.S. carload and intermodal originations for the month were 1,945,646 units, a gain of 104,819 carloads and intermodal units when compared with February 2021.

Carloads for the month were 915,329, a gain of 11 percent or 90,525 carloads over February 2020.

Intermodal traffic was 1,030,317 containers and trailers, which was a 1.4 percent or 14,294 increase.

AAR said 15 of the 20 carload commodity categories it tracks posted gains compared with February 2020.

These included: coal, up 47,238 carloads or 21.3 percent; chemicals, up 19,397 carloads or 16.4 percent; and crushed stone, sand and gravel, up 17,918 carloads or 36.3 percent.

Losing ground were motor vehicles and parts, down 6,358 carloads or 11.4 percent; petroleum and petroleum products, down 3,191 carloads or 8 percent; and all other carloads, down 2,162 carloads or 9.3 percent.

“U.S. rail traffic had big year-over-year gains in February largely because severe winter storms held volumes back last February,” AAR Senior Vice President John T. Gray said in a statement..

“That said, there were pockets of real strength last month,” Gray said.

“For example, carloads of chemicals set a new monthly record last month, carloads of coal were the highest in five months and carloads of lumber were the most in eight months.”

Excluding coal, carloads were up 43,287 carloads, or 7.2 percent, in February 2022 compared with February 2021.

Excluding coal and grain, carloads were up 39,619 carloads, or 7.7 percent.

Total U.S. carload traffic for the first two months of 2022 were 1,817,594 carloads, an increase of 3.6 percent, or 62,664 carloads when compared with the same time period in 2020.

The 2,031,760 intermodal units was a drop of 7.2 percent, or 157,502 containers and trailers. Total combined U.S. traffic for the first eight weeks of 2022 was 3,849,354 carloads and intermodal units, falling 2.4 percent from the previous-year period.