Freight Rail Companies, Workers at Odds as Service Deteriorates

Lesly Wilterding, a signal maintainer based in Fort Scott, Kan., said he has been getting more calls to troubleshoot in places beyond his territory, which means driving longer distances and reducing his rest time.

“We are screaming that we need more people,” said Mr. Wilterding, who has been employed by BNSF Railway for 15 years. He added that many of his colleagues have left, either for smaller railroads or for other jobs, in the past year.

The company no longer pays for rental vehicles when workers’ trucks break down, said Mr. Wilterding. For two weeks in June, he said, he had to share a truck with another signal maintainer whose vehicle wasn’t working, adding to his time on the road.

Resentment on the railroad has been building since before the pandemic, as workers say increased job uncertainty and deteriorating work conditions have made these positions less desirable despite the relatively high pay. According to the National Railway Labor Conference, which represents railroads, an employee of a major freight railroad earned on average $130,000 in total annual compensation in 2021.

“It’s frustrating when we start to feel like an annoyance to our employers rather than an asset,” said Aaron Kemp, a safety trainer in track maintenance at BNSF.

BNSF said that it has added positions in some territories where work has increased and that working hours haven’t changed for its signal maintainers.

The company said that it hasn’t changed its policy on vehicle rentals and that it has protocols in place regarding rentals to minimize disruptions from vehicles breaking down. If a rental isn’t available, “It’s not unusual for a supervisor to give up their vehicle so that operations are not disrupted,” said Zak Andersen, vice president of corporate relations at BNSF.

The major railroads and their unions have been in contract talks since late 2019, after the existing contract came up for renewal. Last week, ahead of a Sunday deadline for the White House to intervene, Mr. Biden appointed a federal panel to investigate the two sides’ disputes and try to broker a settlement on wages and benefits.

Apart from labor issues, customers of railroads have been voicing their frustrations over delays. Shippers say they started to suffer substandard service levels since last fall and complained to federal regulators about delays disrupting the production and delivery of everything from ethanol to grain and livestock feed.

Railroad executives previously said disruptions in their operations have stemmed from deeper issues in the global supply chain, such as equipment shortages at ports and intermodal terminals.

CSX Corp.

Chief Executive

Jim Foote

said that the company has been stepping up hiring, but that executives have been surprised by the number of people who went through training, and then dropped out because they decided they didn’t like railroading. The company has had a particularly tough time retaining engineers and conductors, he said.

“We’ll continue to do whatever we can to change the working environment to make people want to work here,” Mr. Foote said on an earnings call Wednesday. “We don’t have any silver bullet.”

Railroad executives across the board said they are trying to figure out a better schedule for crew members who have to deal with unpredictable demands on their time.

Union Pacific Corp. said it is on course with its hiring and retention goals this year. Executives at the railroad added that they expect crew availability to improve in the second half of the year and that they recently offered a program asking new hires if they might want to work in locations other than where they were hired for.

“That’s providing flexibility that historically we may not have,” Union Pacific Chief Executive

Lance Fritz

said on a quarterly earnings call Thursday morning.

Norfolk Southern Corp.

said Thursday that it is increasing the pay for conductor trainees, from $185 to $200 a day, with additional incentives as they progress through training.

Over the past six years, major railroads have cut their combined workforce by 29%, or 45,000 employees, to streamline operations, according to the Surface Transportation Board, the federal agency that primarily regulates freight railroads.

In recent years, most railroads have implemented “precision scheduled railroading,” or PSR, revamping their networks to run fewer trains on tighter schedules with fewer employees.

While railroads subsequently reported higher profits given the leaner operations, some shippers said service worsened for them. Having to bunch delivery of feedstock to one shipment compared with multiple shipments over several days means having to unload more deliveries at once. If customers are unable to handle a bigger load because of their own capacity shortages, a bottleneck ensues and the problem cascades downstream.

The average weekly dwell time that railcars stay in terminals for processing has increased this year, according to data submitted to STB by the railroads. For instance, in a terminal in Barstow, Calif., railcars were grounded for 56.4 hours in the first week of July, up from 30 hours over the same period a year earlier.

Several factors have made it harder to recruit railroad workers, according to employees and executives. The pandemic shifted many workers’ mind-sets to give priority to family and leisure time. At the same time, railroad work can be physically and mentally taxing and comes with strict rules about safety—including not being on the phone during working hours and having to show up whenever a problem arises—making these jobs a particularly tough sell in a tight labor market.

“Every test and rule is written in blood,” said Ron Doremus, a railroad signalman. “I’ve left my own birthday party to go to a troubled call.”

Write to Esther Fung at [email protected]

Lesly Wilterding, a signal maintainer based in Fort Scott, Kan., said he has been getting more calls to troubleshoot in places beyond his territory, which means driving longer distances and reducing his rest time.

“We are screaming that we need more people,” said Mr. Wilterding, who has been employed by BNSF Railway for 15 years. He added that many of his colleagues have left, either for smaller railroads or for other jobs, in the past year.

The company no longer pays for rental vehicles when workers’ trucks break down, said Mr. Wilterding. For two weeks in June, he said, he had to share a truck with another signal maintainer whose vehicle wasn’t working, adding to his time on the road.

Resentment on the railroad has been building since before the pandemic, as workers say increased job uncertainty and deteriorating work conditions have made these positions less desirable despite the relatively high pay. According to the National Railway Labor Conference, which represents railroads, an employee of a major freight railroad earned on average $130,000 in total annual compensation in 2021.

“It’s frustrating when we start to feel like an annoyance to our employers rather than an asset,” said Aaron Kemp, a safety trainer in track maintenance at BNSF.

BNSF said that it has added positions in some territories where work has increased and that working hours haven’t changed for its signal maintainers.

The company said that it hasn’t changed its policy on vehicle rentals and that it has protocols in place regarding rentals to minimize disruptions from vehicles breaking down. If a rental isn’t available, “It’s not unusual for a supervisor to give up their vehicle so that operations are not disrupted,” said Zak Andersen, vice president of corporate relations at BNSF.

The major railroads and their unions have been in contract talks since late 2019, after the existing contract came up for renewal. Last week, ahead of a Sunday deadline for the White House to intervene, Mr. Biden appointed a federal panel to investigate the two sides’ disputes and try to broker a settlement on wages and benefits.

Apart from labor issues, customers of railroads have been voicing their frustrations over delays. Shippers say they started to suffer substandard service levels since last fall and complained to federal regulators about delays disrupting the production and delivery of everything from ethanol to grain and livestock feed.

Railroad executives previously said disruptions in their operations have stemmed from deeper issues in the global supply chain, such as equipment shortages at ports and intermodal terminals.

CSX Corp.

Chief Executive

Jim Foote

said that the company has been stepping up hiring, but that executives have been surprised by the number of people who went through training, and then dropped out because they decided they didn’t like railroading. The company has had a particularly tough time retaining engineers and conductors, he said.

“We’ll continue to do whatever we can to change the working environment to make people want to work here,” Mr. Foote said on an earnings call Wednesday. “We don’t have any silver bullet.”

Railroad executives across the board said they are trying to figure out a better schedule for crew members who have to deal with unpredictable demands on their time.

Union Pacific Corp. said it is on course with its hiring and retention goals this year. Executives at the railroad added that they expect crew availability to improve in the second half of the year and that they recently offered a program asking new hires if they might want to work in locations other than where they were hired for.

“That’s providing flexibility that historically we may not have,” Union Pacific Chief Executive

Lance Fritz

said on a quarterly earnings call Thursday morning.

Norfolk Southern Corp.

said Thursday that it is increasing the pay for conductor trainees, from $185 to $200 a day, with additional incentives as they progress through training.

Over the past six years, major railroads have cut their combined workforce by 29%, or 45,000 employees, to streamline operations, according to the Surface Transportation Board, the federal agency that primarily regulates freight railroads.

In recent years, most railroads have implemented “precision scheduled railroading,” or PSR, revamping their networks to run fewer trains on tighter schedules with fewer employees.

While railroads subsequently reported higher profits given the leaner operations, some shippers said service worsened for them. Having to bunch delivery of feedstock to one shipment compared with multiple shipments over several days means having to unload more deliveries at once. If customers are unable to handle a bigger load because of their own capacity shortages, a bottleneck ensues and the problem cascades downstream.

The average weekly dwell time that railcars stay in terminals for processing has increased this year, according to data submitted to STB by the railroads. For instance, in a terminal in Barstow, Calif., railcars were grounded for 56.4 hours in the first week of July, up from 30 hours over the same period a year earlier.

Several factors have made it harder to recruit railroad workers, according to employees and executives. The pandemic shifted many workers’ mind-sets to give priority to family and leisure time. At the same time, railroad work can be physically and mentally taxing and comes with strict rules about safety—including not being on the phone during working hours and having to show up whenever a problem arises—making these jobs a particularly tough sell in a tight labor market.

“Every test and rule is written in blood,” said Ron Doremus, a railroad signalman. “I’ve left my own birthday party to go to a troubled call.”

Write to Esther Fung at [email protected]