(C) Common Dreams
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Railroads’ Strategy Thrilled Wall Street, but Not Customers and Workers [1]
['Niraj Chokshi', 'Peter Eavis']
Date: 2022-09-19
From Wall Street’s perspective, however, the railways were ripe for an overhaul, and the changes ended up being straightforward and easy to put in place. At its core, precision scheduled railroading focused on having fixed schedules for shipments rather than waiting for a certain amount of coal to be loaded before moving. Another reform included switching from a system in which locomotives typically pulled one type of freight to one in which they might pull a mixture of grain, coal or other goods in intermodal cars — which can switch among trains, trucks and ships — allowing for longer trains and fewer employees.
“Really, that’s how simple the changes have been,” said Mr. Scarola of CFRA. “And they’re hugely effective.”
Some customers say those changes resulted in worse service. Before the pandemic, many complained that they were having trouble reaching freight sales representatives to sign up and ship more by rail. When they did get through, the shippers complained that the terms they were offered were unacceptable.
Traffic plummeted when the pandemic arrived. Like other industries, freight railroads reacted to the uncertainty of the crisis by laying off and furloughing workers, but demand bounced back quickly as consumers started buying goods in great numbers. When railroads invited furloughed workers back, many had decided to leave the industry altogether. Railroads tried to hire replacements, but have faced a tight labor market. Even when they have hired workers, training new employees takes months.
That contributed to a decline in service, frustrating freight customers even more. Last year and early this year, ethanol plants halted production as they struggled to bring corn in and get ethanol out, and cars full of grain languished for weeks at production facilities.
“I had logistics managers telling me last year, that in their corporations when they go to locate a new facility it used to be they had to locate it on a rail line,” Mr. Oberman of the Surface Transportation Board said. “They said: ‘We don’t do that anymore. We locate on highways.’”
But switching to trucking isn’t possible for many shippers, he said. A single train with 100 cars of coal or grain would require hundreds of trucks to replace it. Rail is also much more fuel-efficient. The trucking industry is facing a driver shortage, and many goods, such as hazardous materials, are best suited to trains.
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[1] Url:
https://www.nytimes.com/2022/09/19/business/freight-rail.html
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