By Joseph Painting, Vermont Rail System, Special to NEAFA
This country has help wanted signs in almost every business window. The transportation industry is not exempt from this, and is also experiencing a shortage of labor. With a focus mainly on railroads, I will highlight some of the causes of this. We have all felt some of the impacts this has had on end user rail customers. I will also share some of the strategic thinking, tactical efforts and actual measures the short lines are employing to manage this situation.
Prior to the pandemic, the class one railroads had ’streamlined’ their operations per the Precision Scheduled Railroading (PSR) model. This included major cutbacks in staffing across the board, much belt tightening and yard closings, longer trains with greater velocity, and a focus on a shareholder bottom line rather than customer satisfaction. In the overall picture, speaking from a very wide and long-range perspective, this may have been a healthy move for these organizations. This change came with plenty of growing pains and a steep learning curve. The class two and three railroads were left to figure out how to provide the needed levels of customer service to those on their lines with slightly less support from the class one connections.
Enter the pandemic. An already very lean railroad work force was beset with not just actual illnesses keeping people from their jobs, but quarantine practices that kept healthy people from their work as well. The protracted nature of this pandemic and the thinking around it (the extra rules, restrictions, masks and regulations) reduced the work force even more and permanently. Retirements, along with a large wave of early retirements, stripped off the top layer of seasoned veteran employees. There isn’t a next wave of enthusiastic replacements that is commensurate with the number of outbound workers. This attrition is at the heart of the issue.
“No way did I realize how difficult it was going to be to try and get people to come to work these days…” James M. Foote, CEO of CSX.
McDonald’s offers a $500 signing bonus and still has trouble filling rosters. We are wrestling with “labor shortages” and 6.9 million people are still claiming some form of unemployment compensation, up 1.2 million from before the pandemic (https://www.bls.gov/news.release/pdf/empsit.pdf). We could postulate about what is involved in this worker shortage for hours. Is it generational? Political? Pandemic related? Drug related? Something else entirely? Whatever combination of circumstances, events, or choices people have made that has led us to this place, we are here now and it is ours to confront.
One class one railroad we connect with admitted to having a class of two hundred conductors graduating with one hundred more in the queue right behind them. This doesn’t cover the attrition they have suffered to date however, so they’ll still be short handed. One short line yard master with a congested yard had sixteen people call in sick or were quarantined in a single day. It isn’t just train crews that are affected either. Shops and maintenance of way crews are impacted as well. This leads to power (locomotives) shortages too. Yard Masters in charge of busy rail yards, full of cars with more trains on the way, have only skeleton crews available to do their work. In my role in marketing, I speak daily to market managers for other roads about rates and routes. I can’t reach some of them now because they are on train crews in the field filling in for the missing. Perish the thought, but what is already difficult will be even more so with a foot and a half of snow, and sub zero temperatures.
Pointing out the situation we’re all in is the easy part. Theorizing about exactly how we got here is an unimportant luxury. Learning how to embrace this difficult situation and solve problems and keep our customers satisfied is the real challenge. Learning how to maintain our level of customer service with increased dwell times at interchanges, leaner workforces, and fewer trains has produced an unexpected bonus for us. Our relationships with our connecting class one roads has improved dramatically and quickly. New lines of communications with them are wide open, and information and cooperation is flowing freely. We are jointly amenable to looking at alternate routes and other on-the-fly adjustments to keep your products moving. We are glad to work with not only other roads, but also suppliers and customers in concerted joint efforts. Our customer service team, train crews, marketing department, and even upper management have all been involved in mitigating delays.
The take home message here is clear. Please think of railroads as allies, because our business depends on your business. It is crucial that we have timely and accurate information from our customers on their needs and issues as they arise. Your thoughtful complaints and legitimate grievances can be constructive and helpful for railroads in getting problems solved and product delivered.
The outlook for regional moves and even local moves on rail in the short term is a positive one, especially with the higher cost and limited availability of trucks. We have been able to provide competitive shipping options for some relatively short hauls. Where trucks used to be the right tool for the job, now we may find other options. Rail might be worth another look.
Looking beyond the near future to a longer perspective, I see a robust recovery and continued growth for the short lines in the northeast. We can’t know specifics yet about where the chips may fall when the CSX completes the PAS takeover, but this major change in the region will certainly offer new opportunities and may even help to alleviate some of the issues we’re facing now.