Posts Tagged ‘railroad freight service issues’

STB Wants More Detail in Service Recovery Plans

June 15, 2022

Federal regulators have ordered four Class 1 railroads to submit more detailed plans to resolve freight service issues that have plagued the industry in the past year.

The order applies to Norfolk Southern, CSX, BNSF and Union Pacific.

In particular, the U.S. Transportation Board has ordered the carriers to correct what regulators see as deficiencies in the service recovery plans all four carriers submitted last month.

The board is also ordering the railroads to provide more information on their actions to improve service and communications with customers, as well as more detailed information on what they’re doing to hire more workers in order to provide more reliable rail service.

For example, STB members were dissatisfied with the plans submitted by NS and UP because they failed to include six-month targets for achieving performance goals.

“Unfortunately, these four carriers submitted plans that were perfunctory and lacked the level of detail that was mandated by the board’s order,” STB officials said in a statement. “The plans generally omitted important information needed to assure the board and rail industry stakeholders that the largest railroads are addressing their deficiencies and have a clear and measurable trajectory for doing so.”

The STB’s statement said the recovery plans need additional information which the STB order has laid out.

The service recovery plans were ordered on May 6 and came shortly after a two days of hearing in late April on shipper complaints of poor rail service.

The STB’s original order said the service recovery plans were to describe remedial initiatives and promote a clearer vantage point into operating conditions on the rail network.

STB to Requires Class 1s to Report More Data

May 7, 2022

The U.S. Surface Transportation Board this week issued a regulation with eight parts that will require Class 1 railroads to provide more comprehensive performance and employment information.

The Board voted unanimously in favor of the rule, which largely is targeted at BNSF, CSX, Norfolk Southern and Union Pacific.

The carriers will be required to create by May 20 service recovery plans that are to be followed up with biweekly conference calls with STB staff.

The rule will be in effect for the next six months.

In its decision, the Board cited problems with rail freight service brought out in hearings it held in late April. It also said the rule is aimed at providing “industry-wide transparency, accountability, and improvements in rail service.”

All Class I railroads are being directed to submit weekly performance data and monthly employment data.

The information being sought by the STB included weekly average terminal dwell times, measured in hours, for each carrier’s 11th through 20th largest terminals.

Railroads are also directed to provide the weekly average number of train starts per day.

There are requirements to report on rail cars in storage, the number of cars in service with no mileage, the number of rail cars in service with the weekly average number of car-miles per day, and the aggregate number of car-miles per week.

Other information to be reported includes information on re-crews, the percentage of scheduled spots and pulls that were fulfilled, the weekly average number of local trains cancelled per day, the aggregate number of local trains cancelled per week, and the percentage of cars constructively or actually placed at destination within 24 hours of the original estimated time of arrival.

Railway Age columnist Frank Wilner described the reporting requirements as an effort to prompt carriers to solve their service problems on their own, beginning with transparency.

In a statement the Association of American Railroads said it was studying the STB’s rule but said its members will continue to work through the service problems they acknowledged having.

Rail Execs Push Back on Shipper, Union Charges

April 28, 2022

As could be expected, executives of Norfolk Southern and CSX took issue in a hearing this week conducted by the U.S Surface Transportation Board with how some shippers, labor unions and other critics have described the causes of service issues both carriers acknowledge having.

However, there was agreement from various quarters that a shortage of operating personnel is a major factor behind the service issues.

But beyond that there was a wide range of opinion as to what can be done or even should be done to ease service issues.

NS Chief Operating Officer Cindy Sanborn said improving service quality is the railroad’s top priority while Chief Marketing Officer Ed Elkins said restoring service is critical to the company plans to gain volume by converting freight from highway to rail.

Annie Adams, NS executive vice president and chief transformation officer, said the company furloughed workers when traffic fell sharply at the beginning of the COVID-19 pandemic.

But she said higher than normal attrition of furloughed employees not returning to work combined with difficulty hiring new workers in a tight labor market have led to crew shortages.

Sanborn argued that crew shortages were the sole culprit of NS’s service problems and denied that they were rooted in the adoption of the precision scheduled railroading model as some shippers and workers have claimed.

 “To varying degrees they are asking you to turn back the clock and return to operating models of the past – operating models that are more resource intensive and less efficient. I think that would be a grave mistake,” she said. “Our competitors in the trucking industry aren’t moving backward. They’re not even standing still. They wake up every day thinking of new ways to leverage technology to implement operational innovations that would improve the customer experience and improve efficiency. And railroads must also think this way.”

CSX executives also made similar comments.

Jamie Boychuck, CSX’s executive vice president of operations, said his company has emphasized hiring new workers and seeking to retain those it already has.

He acknowledged CSX had a difficult time implementing PSR in 2017 but two years later its operations had improved to become the best in company history despite having 2,000 fewer conductors and locomotive engineers.

“Clearly our performance wasn’t driven by how many resources we had, but rather how effectively we leveraged those resources,” he said.

Boychuck said CSX now has more operating workers than it did before the pandemic and has a large number of new conductors undergoing training.

Seeking to provide an independent perspective was Rick Paterson, an analyst at Loop Capital Markets who once worked in the railroad industry.

He agreed that lack of operating personnel is the root cause of the service issues while saying that crew shortages also lead to motive power shortages that slow the network, which results in more power and freight cars needed to handle the same amount of volume.

Patterson argued that performance data shows railroads practicing PSR tend to bounce back more quickly from service disruptions.

He was critical, though, of railroads for not having an adequate “cushion” of employees to draw upon when service is disrupted by weather or other causes.

This he blamed on the influence of Wall Street investors who have long insisted that railroad continuously reduce their operating ratio, which is the percentage of revenue devoted to expenses.

Consequently, Patterson said this has put railroads into a position where if the operating ratio rises then one or more activists investors will come in and demand change.

Patterson said the lack of adequate staffing makes railroading a fragile enterprise subject to a roller coaster effect whereby service reaches a good level only to fall back to a poor level every few years.

There also seemed to be widespread agreement that resolving the service issues won’t be easy because there are no quick fixes.

“If we had a silver bullet we would have brought it to you,” said Chris Jahn, CEO of the American Chemistry Council, which represents chemical manufacturers.

U.S. Secretary of Transportation Pete Buttigieg said there wasn’t much the board could do in the face of crew shortages. “These are complex issues. There’s no single step available to deliver ideal freight rail service overnight,” he said.

More about the Tuesday hearing, which ran for 10 hours, can be found at https://www.trains.com/trn/news-reviews/news-wire/stb-seeks-ways-to-quickly-ease-railroad-service-problems/