First quarter rail headcount bucks downward trend

The number of employees working for the U.S. operations of the Class I railroads rose by nearly 1 percent in the first quarter of 2019 compared with the same period last year, according to data collected by the Surface Transportation Board.

The average number of all U.S. rail employees from January to March of this year was 145,768, a 0.7 percent increase from an average of 144,750 in the first quarter of 2018.

The last time the average number of all rail employees increased year-over-year in the first quarter was between 2014 and 2015. In the first quarter of 2014, that average was 162,523; in the first quarter of 2015, that average was 172,214.

The Class I railroads have been steadily reducing headcount over the last five years, and many of the positions that have been cut are in the administrative, professional and executive categories. Total headcount has been under 150,000 employees since January 2017, in contrast to annual headcount levels averaging 166,486 for 2014, 169,478 for 2015 and 152,867 for 2016.

As the railroads transition to precision scheduled railroading, an operating tool that seeks to streamline operations, and find ways to employ automation throughout their networks, headcount levels aren’t expected to rise back to the levels of the mid-2010s.

“We see labor [headcount] continuing to drop. And it’ll drop through the year as we become more efficient in handling our product,” Union Pacific (NYSE: UNP) chief operating officer Jim Vena told investors during the company’s first quarter earnings call last week.

Even when looking at the total rail employee count on a monthly basis, March’s total of 144,948 workers was the lowest monthly total since February 2018. In comparison, February’s total was 145,800 while March 2018’s total was 145,105.

However, in recent quarters, the railroads have been hiring and retaining more employees in the train and engine category. Train and engine employees are deployed to meet network capacity demand.

The average number of rail employees in the train and engine category in the first quarter of 2019 was 62,022, a 3.5 percent increase from the first quarter 2018 average of 59,943 workers. In comparison, the first quarter averages for other years were 73,045 for 2015, 59,467 for 2016, 58,628 for 2017 and 59,943 for 2018.

In March, train and engine employees totaled 61,673 workers, in contrast to 61,848 in February 2019 and 60,297 in March 2018.