Class Is update service recovery plans for STB
7/8/2022
By Julie Sneider, Senior Associate Editor
The Surface Transportation Board last month ordered BNSF Railway Co., CSX, Norfolk Southern Railway and Union Pacific Railroad to correct deficiencies in their service recovery plans (SRPs). The four Class Is have since filed those supplemental SRPs, which lay out in greater detail what they're doing to fix their service issues, as well as address ongoing challenges with hiring and retaining additional train crews.
The STB ordered the railroads to draft the SRPs — and the supplemental reports — in response to shippers' complaints about poor rail service that they claim has further exacerbated the nation’s overall supply-chain backlog. Although the railroads have publicly acknowledged their service hasn’t been up to par and they’re working hard to address the causes, the STB mandated the SRPs and supplemental reports — as well as weekly data and other information — to gauge the progress with those efforts.
Following are summaries of the Class Is’ supplemental SRPs.
BNSF Railway Co.
BNSF again acknowledged that its service has not been meeting customers’ expectations for several months. The Class I is making progress in restoring service levels to those expectations, but in an uneven manner across different network segments.
"In the month since we filed our SRP, we have seen signs of recovery across many parts of our network, while some other parts of our network remain more challenged, particularly along our Southern Transcon corridor running from Chicago to Southern California," BNSF officials wrote. "But while our overall recovery may take time and there may be short-term setbacks in specific territories, the general trend is toward recovery."
According to its supplemental SRP, the Class I reported the core issues of persisting chassis, driver and warehouse capacity shortages that are consuming BNSF’s resources such as crew, locomotive and linehaul capacity. Particularly hard hit are bottleneck areas on the Southern Transcon, as well as areas leading into Chicago and key intermodal terminals there.
"Our recovery efforts are focused on three areas: bringing additional crews and locomotives online to have the resources necessary to move volumes to meet customer demand, and reducing excess cars on our network to clear congestion and more fluidity move our customers’ freight," BNSF officials wrote.
More recently, the Class I has begun to see the positive impact of its larger 2022 hiring classes graduating from training; repositioning train, yard and engine (TYE) employees through an incentive program; and recent buyback efforts.
In addition, BNSF has increased the size of its locomotive fleet, including boosting the active fleet by 350 units since early winter and taking delivery of another 75 locomotives under lease arrangements.
The railroad’s temporary reduction of rail cars on its network to reduce congestion is showing early success, BNSF reported.
"As an example, between the beginning of April and the beginning of June we reduced the active inventory by almost 4.4% and saw our system velocity and our delivered units increase over the same period," BNSF officials wrote.
In terms of increasing its workforce, BNSF this year has hired about 1,420 new employees (as of June 23), with 805 of them hired since the start of April. The Class I intends to increase its workforce by 3,000 new workers this year, including more than 1,700 TYE employees. So far, more than 659 new TYE employees have been hired or completed training, with another 300 expected to complete training over the next two months.
BNSF's full supplemental SRP can be read by clicking on this link.
CSX Corp.
A shortage of train conductors remains the underlying cause of ongoing congestion and delays, particularly on the southern part of its network, according to CSX’s supplemental SRP.
"In addition to system-wide hiring, CSX is actively recruiting and hiring in specific locations where crew availability has been most problematic, and seeking to proactively address potential future trouble areas," CSX officials wrote.
"CSX is providing customers with transparency into these hiring efforts via a pilot website which displays information about CSX hiring pools at localized levels, allowing customers to provide input in the event [our] focus areas do not match customer needs or growth plans."
To address short-term staffing while new hires complete training, CSX reached an agreement with unions to use voluntary six-month transfers in shortage areas. CSX’s top locations receiving those transferred employees to date have been Manchester and Savannah, Georgia; Cincinnati and New Orleans.
CSX officials are also working with customers to address individual service concerns involving crew availability. The railroad recently temporarily re-routed traffic through locations experiencing less crew delays to reduce congestion and improve cycle times. For example, in one customer's case, CSX routed traffic up the East Coast, then west as opposed to a traditional routing through Southeast operating zones experiencing longer delays.
"CSX’s commercial, operations and customer service teams are continuously engaged with our customers to identify opportunities for more efficient routing in light of the current crew environment," CSX’s supplemental SRP states.
To read CSX’s entire supplemental report, click here.
Norfolk Southern Railway
Like CSX, the foundation of NS’ service recovery focuses on recruiting, training and retaining transportation crews. The Class I’s new TOP|SPG operating plan also addresses ways to better serve customers’ changing needs and continued consumer demand by making daily operations "simpler and more consistent," NS President and CEO Alan Shaw wrote in a letter accompanying NS’ supplemental SRP.
Among locations where crew shortages are affecting service the most are Birmingham, Alabama; Bellevue, Ohio; Decatur, Illinois; Harrisburg, Pennsylvania; and Macon, Georgia. To attract new hires in a tight labor market, the railroad has raised conductor trainee pay, offered hiring bonuses, tightened hiring and onboarding time, added training classes and shifts, and offered permanent and temporary transfer opportunities.
NS is also using three data-driven, short-term levers to increase T&E staffing in critical locations with currently employed T&E workers: availability bonuses, vacation buybacks and retirement deferrals.
To better estimate future labor needs, the railroad is offering retirement announcement incentives, which pay employees for giving advanced notice (at least six months) of intent to retire.
However, the pandemic's effect on the labor market and economy may likely endure, which will require NS and the rail industry to make other changes to adapt, company officials noted. Those changes may include streamlining hiring processes; working with unions to be more flexible to deploy existing employees; being vigilant about the labor participant rate to ensure enough employees are on hand and in training; and "harness technological advancement" to make sure the railroad can operate competitively and efficiently.
To read NS’ entire supplemental SRP, click here.
Union Pacific Railroad
In its revised SRP, UP officials noted that steps taken to improve service reliability are starting to make a difference.
"Since mid-April, several Union Pacific operating metrics have improved. Freight car velocity improved from 177 car miles per day to 197 car miles per day, and our Operating Inventory decreased from over 200,000 cars to around 184,000," the railroad reported.
Those steps have involved three main areas: workforce initiatives, customer experience improvements and network optimization.
To sustain its workforce, the railroad is focused on recruiting, hiring, training and retaining. It generally sets six- and 12-month goals for hiring in various workforce categories, including TE&Y. In 2022, the railroad intends to hire 1,400 new TE&Y employees, a 400-person increase year over year. Additionally, the railroad anticipates it will hire 500 to 800 new TE&Y employees in the first two quarters of 2023.
Moreover, current demand for new hires is projected to be 550 to 600 engineering workers in 2022; 510 mechanical employees in 2022 and another 310 in 2023; 140 crew management service employees in 2022; and another 15 customer-care-and-support employees to bring that team’s size to 204 employees in 2022.
To improve the customer experience, UP plans to invest $300 million in online tools and other technology designed to make it easier to do business with the railroad. The Class I also recently restructured its Harriman Dispatching Center management to better improve coordination between field employees and dispatchers, and increased direct communication with customers, including through weekly service updates and key performance indicators.
In terms of operations and network optimization, UP is redistributing resources to reduce congestion and improve fluidity. Steps taken have included:
• limiting some shippers’ traffic to reduce clogged rail lines;
• modifying the Great Lakes Service Unit’s transportation plan to balance workload with increasing volumes; and
• relocating TE&Y employees to locations across UP’s east/west mainline through Nebraska and Wyoming to address a traffic backlog after the Southern Powder River Basin mines closed for two days in April due to weather.
"As a result of the network being more fluid, we have stopped storing cars distributed by Union Pacific, pulled nearly 650 intermodal well cars out of storage and back into service, and are in the process of returning to service a variety of 900 cars, in total, to support customer carload demand," the revised SRP states.
To read the entire UP plan, click here.
