The freight railroads’ industrywide deployment of technology has been a key factor in headcount fluctuations throughout the decades.
But technology’s impact on the number of employees working for the U.S. freight railroads in the future could depend on the railroads’ balance sheet goals or on federal or state intervention, according to industry observers.
Historical link between technological advancements and headcount
Headcount levels typically reflect market demand for rail service, with higher rail volumes translating into a need for more staffing.
However, other factors contribute to long-term employment trends at the U.S. operations of the Class I railroads. One is technology.
At the turn of the 20th century, U.S. freight and passenger rail operators hired thousands of workers not only to manage the growth of the rail industry but also to ensure trains ran smoothly and efficiently, according to Nicholas Little, director of railway education for the Center of Railway Research and Education. The center is affiliated with the Broad College of Business at Michigan State University.
Technological advancements in the railroads’ early history focused on safety, and those advancements eventually influenced headcount. For instance, air brake systems replaced the brakemen who would climb across the train and manually apply the brakes on each railcar, according to Little.
Transitioning from steam-powered to diesel-powered locomotives also affected the crews assigned to maintain the locomotives and rolling stock. Diesel locomotives required less maintenance, which resulted in a downsizing in mechanical departments, noted rail economist Jim Blaze.
Freight railroads also shed much of their asset base, such as bridges and tracks, as market competition arose from trucks and barges, Blaze said. That also led to fewer people needed to maintain those assets, he said.
As technology advanced even further in the 20th century, the focus has turned to sensors that can detect potential problems on the train, on the right of way or on the track, according to Little. These include mobile sensors on moving vehicles, railcars and locomotives, as well as wayside sensors on the network that can detect potential issues as rolling stock goes by.
“You don’t need to do responsive [maintenance]. We can do predictive maintenance and improve efficiency because we’ll be able to repair and fix things before they cause a problem,” Little said.
As the focus turns from preventative or responsive maintenance to predictive maintenance, a railroad can look to reduce staff members who would’ve otherwise taken care of issues after they’ve happened, according to Little.
Although precision scheduled railroading (PSR) has been credited with much of the recent decline in freight rail headcount because of its focus on streamlining rail operations, Little views technology as having the greater impact on headcount staffing levels.
“To me, PSR was little more than applying standard lean principles on a railway. Those were principles we’ve seen in many other industries, particularly in manufacturing, for years now,” Little said.
He continued, “By scheduling or timetabling the trains, you can improve the whole operation much more efficiently. And you can make the working conditions better. You can tell people at the start of a week or a month or whatever period you choose that this is what you’ll be doing on these days. Whereas at the moment, people are on call 24 hours a day, seven days a week after a mandatory rest period. And they don’t get back home every night.”
Does PSR play any role in declining headcount?
Still, others argue, PSR has affected headcount in recent years. But its role in reducing employee numbers at the U.S. operations of the Class I railroads may differ according to the stakeholder.
For many of the rail unions, decisions to close maintenance shops and rail yards are tied to operational changes related to PSR.
Longer trains, which are also a function of the industry’s technological advances, are another tool used in deploying PSR.
“They’ve used precision scheduled railroading as a mechanism to furlough as many employees, mothball as many locomotives [as possible]” and drop available service times for customers, said Jeremy Ferguson, president of the International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division (SMART-TD).
Meanwhile, Blaze sees PSR as part of a complex, robust culture that enables the railroads to continue to outsource much of their sales and marketing functions to other companies. That trend started as early as the late 1970s to early 1980s with Conrail’s decision to outsource some of those functions specifically in intermodal, according to Blaze.
The railroads “outsource finding beneficial cargo shippers and beneficial cargo receivers to the ocean carriers and domestically to J.B. Hunt, Schneider, Hub Group and to third-party logistics companies, while the rail carriers supply track, locomotives, rail cars, train dispatching, crews and wholesale rail rates,” Blaze said.
“We’ve seen a significant decrease in the number of employees in the T&E [train and engine] and G&A [general and administrative] functions … . There’s been a consolidation and downsizing that has accelerated with PSR,” Blaze said. “That financial model is in large part a way to try to reduce the amount of nonessential workers needed to move traffic.”
While Blaze noted that there are connections historically between rail volume levels and headcount levels, the difference between earlier examples and recent years is that the productivity gains as a result of technological advancements and PSR aren’t necessarily translating to improvements in rail service at the customers supply chain level.
“Are they going, at some point, to hire back more people to become more like a trucker or broker?” said Blaze. The railroads have saved billions in efficiency gains, but he questioned whether they have lowered rates. “What is PSR delivering to the customers’ cost reductions?”
Technology’s role in future headcount decisions
Technological advancements aimed at making freight rail operations safer could influence headcount levels in the future. But how much the two will correlate remains unclear.
Indeed, the role of implementing safety technology appears to be a key issue in the debate about whether federal or state governments should mandate a minimum train crew size.
The Association of American Railroads (AAR) has argued that federal regulations governing crew sizes would deter technological innovations such as automation. These innovations could ensure the industry’s competitiveness in the long term.
“Privately owned freight railroads must be allowed to determine operating models most conducive to optimal safety and service performance. Federal prescriptions lacking empirical justification must not be made the law,” AAR says on its website. “Railroads are committed to good faith negotiations on issues — including the implementation of new technologies and train operations that maximize safety benefits and efficiencies — with their employees in the forum in which those issues have historically been resolved.”
The railroads must also compete with technological innovations in other transport modes, such as autonomous trucks, according to other industry observers.
Meanwhile, Ferguson and other union members argue for a federal mandate supporting train crews involving two people or more.
“We realize that automation is coming. But I don’t think it’s fair and it’s a long ways off as far as safety is concerned,” Ferguson said.
“A lot of what they’ve done in the past has never put all the responsibility of operating the train down to one person, Ferguson continued. Sometimes the trains are 5 miles long, and if they’re carrying hazardous materials and something goes wrong, “one person can’t handle all that no matter how much technology they throw at it,” he said.
Although single-person train crews have long been used on passenger, short line and freight rail systems, according to AAR, the technology that might enable autonomous trains in the U.S. is still a ways off, says Blaze.
Positive train control, “which is essentially a fail-safe braking system, … doesn’t easily convert to the automation of trains,” Blaze said. A number of technological advances need to happen first in order for PTC to serve as a gateway to autonomous trains — and potentially enable another level of people-cutting, he said.