FRA, STB leaders raise red flags over UP worker furloughs

Editor's note: This story has been updated with a response from Union Pacific.

Federal Railroad Administration Administrator Amit Bose yesterday told Union Pacific Railroad CEO Jim Vena that the company's furloughs of maintenance of equipment (MoE) workers jeopardizes the safety of railroad workers and the public.

In a letter sent yesterday, Bose wrote to Vena that the FRA had previously communicated its concerns to UP about the potential risks of cutting staffing levels in mechanical operations and other "critical" departments.

"It has come to the FRA’s attention that UP has again chosen to prioritize cost-cutting measures over ensuring safe operations, jeopardizing the well-being of both UP’s workers and the public,” Bose wrote in the letter, available here, which the Surface Transportation Board (STB) posted on its website.

"Despite FRA's warnings and recommendations, and at a time when Class I freights should be prioritizing ways to improve a decade-long record of stagnant safety performance, it is disappointing to see that UP is actively disregarding the federal government’s concerns," the letter states.

Citing employment data that UP submitted as required to the STB, Bose’s letter notes that UP’s furlough count in December 2023 increased from 532 to 751, with 145 being MoE employees. UP’s MoE furloughs had been gradually trending down for more than a year — form 101 in April 2022 to four in July 2023, but then jumped back up to 100 in August 2023. From there, the furlough trend continued upward.

"The data … demonstrates a disturbing trend that makes me question UP's commitment to safety," Bose wrote, adding that the data does not include January 2024 numbers.

Bose also noted that UP made the “unprecedented decision” to ask the STB for a protective order on some of its required employment data reporting. If the STB grants the order, "UP will become the only Class I railroad where FRA cannot track furlough counts, further causing me to question UP’s priorities."

Bose urged Vena to reconsider the decisions to furlough MoE employees and instead develop an alternative plan to ensure safe and efficient operations.

"FRA is committed to upholding the highest safety standards for our Nation’s rail network, and I expect full cooperation from UP to address this critical issue," Bose wrote.

In a letter sent today to Bose, Vena suggests the information the administrator cites is taken out of context.

"Your letter combines different types of workers (mechanical employees and engineering employees) and work done on the railroad (equipment maintenance and capital projects), and therefore paints an incorrect and incomplete picture of the natural role workforce fluctuations play in operating a railroad year-round," Vena wrote.

UP is "confident" that it has the people and practices in place to safely operate its railroad, Vena said, and added that he's looking forward to meeting with Bose to further discuss the data. Vena's letter can be read here.

Meanwhile, in a speech yesterday at the Southeast Association of Rail Shippers conference in Atlanta, STB Chairman Martin Oberman was critical of Wall Street pressure on Class Is to cut resources, slash workforces, raise prices and reduce service in order to achieve short-term profits. As a result, freight-rail service deteriorated a few years ago to the point where it became a crisis for shippers. In response, the STB in April 2022 held a hearing on the situation and required the Class Is to regularly report service metrics data and employment counts.

After the 2022 hearings, some progress was made, as the Class Is hired and trained employees to address the service problems, Oberman said.

"But one standout failure of progress was at UP," he said. “During 2022, UP—alone among the railroads—was subject to two emergency service orders—the first issued by the STB in over 10 years. UP also instituted a massive upsurge of 1,100 embargoes annually—labeling them congestion embargoes—a legal animal which in my opinion, does not exist, except possibly when the congestion is entirely the fault of the rail customer."

In December 2022, the STB held another hearing to investigate the embargoes. At the hearing, UP conceded that crew shortages led to its use of “congestion” embargoes. Also at the hearing, UP CEO Lance Fritz was pressed to answer whether UP would maintain the resources to start providing adequate service, Oberman noted.

"UP’s Lance Fritz told the STB: 'We learned our lesson once; we don’t have to learn it again.' And shortly thereafter he was shown the door — replaced by a management strategy which we now know has profoundly rejected and unlearned the lessons of too much cutting," Oberman said, according to a transcript of his speech, which can be read by clicking here.