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  • ITVI.USA
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  • OTRI.USA
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  • OTVI.USA
    10,350.660
    -119.540
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  • TLT.USA
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  • WAIT.USA
    158.000
    8.000
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  • DATVF.SEALAX
    1.289
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    17.7%
  • DATVF.LAXDAL
    1.605
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  • DATVF.DALLAX
    0.914
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  • DATVF.ATLPHL
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  • DATVF.LAXSEA
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  • DATVF.CHIATL
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  • DATVF.VSU
    1.260
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  • DATVF.VWU
    1.688
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    5.8%
  • DATVF.VEU
    1.562
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  • DATVF.VNU
    1.503
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    1%
  • DATVF.PHLCHI
    0.953
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  • ITVI.USA
    10,331.830
    -120.380
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  • OTRI.USA
    8.090
    0.070
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  • OTVI.USA
    10,350.660
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  • TLT.USA
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NewsRail

Unions criticize practice of furloughing in the rail industry

Some rail unions are becoming more vocal about the rail industry’s practice of furloughing employees, saying the cuts in staffing that have resulted because of precision scheduled railroading (PSR) are stretching the workforce too thin.

“Mass layoffs have been a disturbing and central component of PSR operations… Railroads may want us to believe these workers are extraneous, but it has become clear that reductions are simply about cutting costs, even if those cuts result in the degradation of safety,” said the October 29 policy statement of the Transportation Trades Department (TTD) of the AFL-CIO, which is a coalition of 33 member unions. “Workers who remain have been forced to do more with less, and are faced with discipline or dismissal if they refuse to comply. The consequences of these choices are no longer hypothetical.”

Furloughing employees is a long-standing practice of the freight railroads and serves as a means of adjusting staffing levels to meet demand. Furloughs, which typically involve unionized workers, can occur seasonally, such as maintenance-of-way employees working in larger numbers in the non-winter months. For instance, furloughs typically increase right before Christmas every year because the railroads pare down their operations after the fall peak shipping period. Employees expect to be furloughed at certain points throughout the year and adjust their budgets accordingly.

Furloughs can also occur if a freight railroad experiences lower rail volumes, as the Class I railroads have in 2019. 

From a railroad’s perspective, furloughing employees enables the railroad to bring back employees should volume return, instead of having to find employees and having them undergo a training program that can last at least six months if not more. In contrast, layoffs typically occur to non-agreement staff, such as those working at headquarters or in management.

But furloughs and layoffs have increased as almost all of the Class I railroads have adopted PSR. PSR seeks to streamline a railroad’s operations by running longer trains on a fixed schedule. Another goal of PSR is to cut a railroad’s costs.

“The combination of weaker traffic levels and a focus on precision scheduled railroading principles that strive to maximize the efficiency of the operation have each played a role in the aggressiveness of carriers to use furloughs in the present cycle,” said Todd Tranausky, vice president of rail and intermodal services for FTR Transportation Intelligence, a consulting firm. 

Tranausky pointed to October data from the U.S. Bureau of Labor Statistics showing that rail transportation jobs have declined nearly 8% compared with October 2018. The transportation sector was also the fastest contracting sector, beating out even motor vehicle parts and manufacturing, which was impacted by a strike during the month, Tranausky said. 

FreightWaves has reported previously how headcount levels at the U.S. Class I railroads have fallen to their lowest levels in 2019.

The unions and the railroads acknowledge that recent furloughs are partly the result of operational changes brought about by PSR. Norfolk Southern (NYSE: NSC) last week confirmed it furloughed 95 employees in Altoona, Pennsylvania, and 58 employees in Chattanooga, Tennessee, while Union Pacific (NYSE: UNP) recently closed its Neff Yard in Kansas City, Missouri, and moved the Neff Yard’s operations to other facilities nearby.

Norfolk Southern (NS) said the furloughs are related to the company’s organizational realignment that was announced earlier this year.

“Consistent with our strategic plan and current business levels, our ability to streamline operations and use fewer locomotives has required the difficult but necessary decision to reduce our locomotive mechanical forces due to the decreased demand for locomotive maintenance and repair. Norfolk Southern will continue to evaluate staffing needs as our business evolves,” NS said. The company added that furloughed employees might have the opportunity to apply for other positions.

“In today’s rapidly changing environment, Norfolk Southern continues to focus on ensuring that we have the optimal number of people and assets at every location across our system in order to operate safely and efficiently. As we execute our new strategic plan, we expect that targeted hiring and furloughing will remain components of our operating model,” NS said.

Meanwhile, Union Pacific (UP) said it closed the Neff Yard as a result of its efforts to streamline operations. 

“Union Pacific values safety above all else, and our employees understand we will not sacrifice the well-being of our team for productivity. Work conducted at Neff Yard was transferred to nearby facilities that handle rail cars with the same necessary safety protocols and inspections,” UP said.

Unions voice concerns about PSR’s impact on employees

But rail unions are questioning whether the furloughs are justified, especially in light of the higher profits and the lower operating ratios that have occurred as a result of PSR. 

These concerns also come as the railroads and the unions are about to undergo negotiations to modify collective bargaining agreements.

“Despite taxpayer dollars and tax cuts helping Union Pacific gain more per share for Wall Street, their way to say ‘thanks’ seems to be, pack up and go,” said Ty Dragoo, legislative director for Kansas for the Sheet Metal, Air, Rail and Transportation union – Transportation Division, also known as SMART-TD. Dragoo was referring to UP’s closure of the Neff Yard and the closure’s ensuing job losses. “This is leaving behind an economic catastrophe for impacted communities to clean up for themselves. To add insult to injury, the company didn’t even have the decency to warn employees until a few days out.”

Dragoo continued, “These job losses will ripple through the heart of the local economy. Without income and security, workers and families won’t be able to spend on clothes, restaurants, recreation and much more. Union Pacific isn’t only undermining workers and families, but entire regional economies.”

Meanwhile, the TTD said the workers that have remained after jobs have been cut are being stretched too thin. 

“As carriers that have prescribed to PSR run fewer trains, understaffed shop craft facilities are reporting increasingly idle locomotives and equipment, but lack the workforce to keep the equipment in a state of good repair. In some cases, carriers are closing facilities entirely, increasing the workload for employees elsewhere who are already overwhelmed,” TTD’s October policy statement said. 

“Carriers are also compensating for reduced staffing by requiring remaining employees to perform work outside their craft in addition to fulfilling their regular duties. At best, this may involve employees performing tasks with which they are not experienced. At worst, employees may be forced to do work for which they are not qualified,” the statement continued. “Furthermore, rather than maintaining appropriate staffing levels, carriers are mandating overtime for workers who are already stretched thin. In an industry where fatigue is a constant risk factor, exposing employees to additional fatigue by asking them to work longer and faster while performing multiple jobs is a recipe for disaster.”

With shippers also airing their concerns about some of the effects of PSR before the Surface Transportation Board earlier this year, the TTD policy statement questioned whether the U.S. government should be more involved in providing a check and balance to the railroads’ PSR efforts.

PSR “works for the few – wealthy investors who have little concern for anything other than their bottom lines. These investors are fickle, and when they have extracted every last cent out of the railroad industry, they will move on to the next sector. Meanwhile, we will be left with a hollowed-out system that does not serve its customers, has abandoned safety, and has pushed out thousands of skilled workers who may never return,” the statement said. “This trajectory can be changed, but doing so will require active engagement from Congress and federal safety and economic regulators, as well as a serious rethinking of operational strategy from freight rail carriers. TTD calls on them to reverse the damage caused by PSR before it becomes too late.”

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.

11 Comments

  1. From what I have seen of NS locomotive fleet, the whole damn fleet should be taken to the scrap yard! Their units along with UP units always seem to have something wrong with them and in extreme cold weather are nothing but a accident waiting to happen.

    1. You are so correct on this. With the cuts in the machine shops the locomotives at UP are always broke down , and disgusting . Lack of service to save a dime .

  2. All Class 1 RRs under PSR are reducing their locomotive fleet by scrapping, selling to leasing companies or shortlines. Barely have enough power to pull tonnage trains. The good strong engines that burn too much fuel are sold off. It’s sad out there on the rails.

  3. They sure have built their house on the shoals. One cannot run off customers and expect a return. The carriers are committing fiscal suicide for a quick return to fat cats…

  4. These longer trains are impacting our communities. They now commonly block crossings at grade, and often for long periods of time. These crossings at grade have historically not been an issue due to the fact that a shorter train can hold back from or fit between the crossings. As a result the traffic congestion in the communities is becoming unnecessarily severe. Parents cant get their kids to school on time. Ambulances cannot get to accidents. Pedestrians at the crossings will often climb through parked train rather than wait for the train to move. Furthermore the Class 1’s actively lobby against state and local governments proposals for fines when crossings are blocked, and refuse to coordinate with local authorities on methods to alleviate the situation.

    1. They like to say they don’t block as many crossings as before. Ask them how crossings they have torn up or placed out of service since starting PSR. I bet they have taken up 1/3 or more.

      They spin this propaganda to the public.

  5. 1) A recent article stated an average worker makes $122,000 per. That’s a joke.

    2) Some of us make a lot, but it is because we are forced to work under duress due to “manpower shortages”. We are slaves to the company, “Work or be fired.” Some of us work over 500 days per year. Yes that’s true.

    3) Low level managers are people off the street and have no background in managing employees or inventory.

      1. Railroading is coming to a end as we know it if unions don’t quit shilling, slithering like snakes, and grow a fucking backbone and strike like we should have long ago or at least stand up to these vampires that want to suck everything out of everyone and fraction of a penny out of every cent. Time to go at them hard or just look for new jobs. I’m not sitting on a train for 12+ hours by myself hardly rested and risk the public with noone to talk with to keep me up. Safety is now number 4 on NS company statement. That’s the only thing they don’t lie about.

  6. worked for the N&W and NS for 42 years ,Can’t believe that they are doing the PRS,Since they fought so hard to keep Hunter Harrison from taking NS over,What is going on ? Heard that they Abolished the Third shift at Lamberts Point Coal Pier 6,And are working all crews over 8 hours mostly 10 to 12 hours,How is this saving money? The overtime is racking up costing them a big payroll.Big derailments are bound to happen as they are laying off MW crews and not maintaining their property,The Unions need to step up and fight this ,heard locomotives are not being serviced and its got to smell bad in there,Sounds like they need to get the Health Department to inspect them !!! Glad I am retired ,but what has happened to their the upper Management that fought Hunter Harrison so much? And their safety is gone down to # 4 priority

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