Tag Archives: railroads

America’s freight railroads are incredibly chaotic right now, by Rachel Premack

Posted on July 15, 2022 | 3 comments

Straight out of Atlas Shrugged, even the train picture. From Rachel Premack at freightwaves.com:

A ‘disastrous’ rail strike may occur

train
Majestic, but fraught. (Jim Allen/FreightWaves)

Jason Doering has seen a lot during his 18 years at Union Pacific Railroad. But what’s happening with the current hiring class at UP is unprecedented. “They’re dropping like flies,” Doering said. “I mean, I’ve never seen it.”

A railroad engineer or conductor typically earns a six-figure salary, retires with a pension and enjoys union benefits. They don’t need a college degree; the monthslong training is provided on the job. It’s the kind of career that ought to be popular — but Doering said trainees and longtimers alike are getting burned out. It used to be a job with eight- or nine-hour shifts and plenty of time at home. Now, Doering says railroading demands too much time away from one’s family and workdays that last up to 19 hours, combining 12-hour shifts with hours of waiting around for transportation or relief crews.

Union Pacific is struggling to find railroad crews after years of slashing headcounts. The $22 billion railroader had 30,100 employees during the first three months of 2022, according to its latest earnings report. Five years prior, the company had nearly 12,000 more workers. (A representative from Union Pacific declined to provide a comment for this article, as the company is reporting its second-quarter earnings later this month. The rep did share a company blog on the importance of supply chain fluidity and cooperation.)

This employment issue isn’t unique to Union Pacific. America’s railways are in an unusually chaotic state as Class I lines struggle to find employees. That’s led to congestion that analysts say is even worse than 2021, which saw some of the biggest rail traffic in history. Now, a strike of 115,000 rail workers could happen as soon as next week.

Continue reading→

3 Comments

Posted in Business, Collapse

Tagged

After Slashing 33% of Workers in 6 Years, Railroads Complain about Labor Shortages, amid Uproar over Slow Shipments, by Wolf Richter

Posted on July 23, 2021 | 1 comment

Sometimes its nice to have a few extra workers; you never know when you’re going to need them. From Wolf Richter at wolfstreet.com:

“No way did I realize how difficult it was going to be to try and get people to come to work these days”: CEO of CSX.

So there are few hiccups in the US economy right now. James Foote, the chief executive of CSX, one of the largest railroads in the US, put it this way during the earnings call yesterday (transcript by Seeking Alpha):

“I’ve never seen any kind of a thing like this in the transportation environment in my entire career where everything seems to be going sideways at the same time,” he said.

“In January when I got on this [earnings] call, I said we were hiring because we anticipated growth. I fully expected that by now we would have about 500 new T&E [train and engine] employees on the property,” he said. “No way did I or anybody else in the last six months realize how difficult it was going to be to try and get people to come to work these days.”

“It’s an enormous challenge for us to go out and find people that want to be conductors on the railroad, just like it’s hard to find people that want to be baristas or anything else, it’s very, very difficult,” he said.

“Nor did we anticipate that a lot of the people were going to decide they didn’t want to work anymore. So attrition was much higher in the first half of the year than what we had expected,” he said.

“So even though we brought on 200 new employees, we fell short of where we thought we would be by now….”

Railroads are grappling with a weird phenomenon that is a combination of “labor shortages” and 12.6 million people still claiming some form of unemployment compensation, amid stimulus-fueled demand.

Continue reading→

1 Comment

Posted in Business, Economy, Government, Labor

Tagged ,

US Freight Drops to Worst May since 2010, by Wolf Richter

Posted on June 21, 2016 | Leave a comment

The goods-hauling part of the transportation sector keeps sinking. From Wolf Richter at wolfstreet.com:

Goods economy sinks, drags down trucking & railroads.

“May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” predicted Rosalyn Wilson at Cass Transportation a month ago. It has now come to pass – only worse.

Freight shipments by truck and rail in the US, excluding commodities, fell 5.8% in May 2016 from the already anemic levels in May 2015, and 7.0% from May 2014, according to the Cass Freight Index, released today. It was the worst May since 2010.

“This year we have failed to see the robust growth in shipments that we expect to see this time of year,” Wilson lamented.

In fact, aggregate shipment volume over the first five months, according to the index, was the worst since 2010. And freight is one of the most reliable gauges of the goods-producing economy.

The Cass Freight Index is based on “more than $26 billion” in annual freight transactions by “hundreds of large shippers,” according to Cass Transportation. It does not cover bulk commodities, such as oil and coal and thus is not impacted by diminished oil-train activity and collapsed coal shipments. The index is focused on consumer packaged goods, food, automotive, chemical, OEM, heavy equipment, and retail.

The Index is not seasonally or otherwise adjusted, so it shows strong seasonal patterns. In the chart below, the red line with black markers is for 2016. The colorful spaghetti above that line represents the years 2011 through 2015. The only month this year that was not the worst month since 2010 was February; only February 2011 was worse. That’s how bad it has gotten in the Freight sector:

“Truck tonnage continues to slide for both linehaul and spot markets,” according to the report. And railroads are also singing the blues.

The Association of American Railroads (AAR) reported earlier that May carloads, which include commodities, had plunged 10.3% year-over-year, while containers and trailers had dropped 3.3%, for a combined decline of 6.8%.

“Most economists think the economy has picked up in the second quarter from the dismal 0.8% growth in the first quarter, but so far railroads aren’t seeing much of it,” said AAR Senior Vice President of Policy and Economics John Gray when commenting on the dismal report.

“A variety of environmental and market forces continue to punish coal, and high business inventory levels and excess truck capacity, among other things, are pressuring rail intermodal volumes,” he said, blaming in part competition from desperate truckers for the railroads travails.

In the Cass Freight Index report, Wilson worries about the “volatile” economic outlook: “What is perceived as a strong sign one week often looks like a sign of economic weakness the next,” she said. “The global economy is facing many unsettling influences, such as Britain’s possible exit from the EU, China’s economic woes and currency problems, and oil prices.”

This “volatile” outlook and the “unsettling influences” impact the dollars and cents of the freight sector.

To continue reading: US Freight Drops to Worst May since 2010

Leave a comment

Posted in Business, Economy, Uncategorized

Tagged , ,