Surface Transportation Board Chairman Martin J. Oberman says rail service is suffering for one simple reason: The big four US Class I systems aren’t paying enough to retain and recruit train workers.
BNSF Railway, CSX Transportation, Norfolk Southern and Union Pacific are facing ongoing crew shortages that have caused widespread congestion and significant delays since last year.
The railroad says the crew shortage is largely due to factors beyond their control. At the start of the pandemic the crew did not return to the railroad at the same rate as they normally would, and with the pandemic the great resignation caused the casualties to escalate and affected all businesses. Meanwhile, the historically tight labor market has made it difficult to hire conductors, an outside job with an unpredictable schedule and a significant amount of time spent away from home.
Oberman says he has told every railroad CEO that “there is a price that will give you enough employees. I don’t know what that price is. But everything has a price.”
Railroads and the unions that represent most of their employees have been unable to reach a new contract after three years of fruitless negotiations. Both sides remain distant, with railroads offering a 17% increase and unions demanding a 31% increase. The contract dispute is now with the President’s Emergency Board, which will make recommendations for a settlement.
In an interview last week, Oberman declined to comment on the negotiation process or the president’s emergency board. But he says it is clear that the higher wages will help the railroad attract enough new workers to restore service to normal levels.
“If you need another 400 workers to move the trains that are sitting there, pay whatever price you need to get them,” Oberman says. “Don’t come in and tell me renting is hard. And it’s not like they can’t afford it. They’re paying billions and billions every year in stock buybacks. You can use some of that for yourself.” to get the workforce.”
Railroads has increased conductor training pay and is offering signing bonuses to new employees and retention bonuses to current conductors and engineers. He has offered incentives to temporarily relocate engineers and conductors to areas where crew shortages are most severe.
Oberman argues that those efforts are falling short, noting that staffing levels on the big four railroads have not yet returned to pre-pandemic levels. “Railways are not offering enough rewards – a combination of quality of life and compensation – to keep people there. There is a price people will live at,” he says.
The Board has no authority over Railway Labor matters. But it does regulate the service, which is linked to the level of rail employment. Oberman says it is clear that the railroad does not have enough operational staff to provide adequate service.
The STB has no plans to use its mandate to oversee the service as a way to indirectly regulate railroad crew levels. “I’m not the backdoor kind of guy,” Oberman says.
But he questioned whether railroads, at their current staffing levels, were able to meet their common carrier obligation to provide service upon reasonable request.
If there was a more concrete way to enforce the common carrier obligation, Oberman says it’s likely that railroads would do a better job of matching employment levels to freight demand. And if there were more specific definitions about what is required under common carrier obligations, perhaps shippers would file cases with the board, Oberman says.
(he spoke with trains news wire Before a major House committee introduced the law which will set minimum service standards for shipments covered under the tariff, and provide clear direction to STBs with respect to disputes over railroad common carrier obligations.)
Obermann noted that none of the shippers had yet brought a case to the Board that resulted in BNSF bans certain types of carload shipments going into California, which began on June 27 and remains in force. “Hundreds of shippers are not being moved – at all,” Oberman says.
“For me, all these problems stem from a lack of competition,” Oberman says.
Imagine, he says, if McDonald’s fired all its burger-flippers but told another customer they had to wait an hour for their order to be ready. Had there been a fully staffed Burger King on the street, McDonald’s would lose customers and eventually have to hire more employees.
But if the next burger joint is 10 miles away, Oberman says McDonald’s could get away with a lone burger flipper.
Banned BNSF shippers are stuck just as McDonald’s customers will. “BN really doesn’t have to be afraid of losing those customers by cutting all those employees,” Oberman says. “So they are not encouraged to run the business any differently because there is no real competition for so many rail users.”
UP, which is struggling with a crew shortage of its own in California, hasn’t tried to trap any traffic, rendering the BNSF unable to move, Oberman says.
railroad says They have lost volume and revenue because they cannot meet freight demand.And that they have every incentive to provide good service.
He said, ‘I have no shame in expressing my views. I think the board shares them in common,” Oberman says. “The railroads haven’t employed enough humans to do the work.”