Thread regarding Norfolk Southern Corp. layoffs

Spankings

Chairman Martin Oberman questioned Class I executives about the ongoing service crisis on America’s freight railroads during a two two-day hearing in Washington D.C.

Execs Respond to Criticism As Rail Service Hearing Continues

By Justin Franz

WASHINGTON — Following hours of testimony from railroaders and shippers expressing frustration with how America’s Class Is are running — often placing the blame squarely on the practice of Precision Scheduled Railroading — top officials at those railroads took the stand to respond to that criticism during the second day of a U.S. Surface Transportation Board hearing on the ongoing rail service crisis.

During the hearing in Washington D.C., executives from BNSF Railway, Union Pacific, Norfolk Southern and CSX Transportation all admitted that they were “not meeting expectations” for their customers or themselves, but that they were working tirelessly to try and fix it. But STB Chairman Martin Oberman said he wasn’t buying what they were saying, holding up year-old letters from BNSF CEO Katie Farmer and UP CEO Lantz Fritz stating that they were “confident” and “well-positioned” that they could handle an increase in freight traffic following the pandemic-induced economic downturn.

“I hear what you’re saying and I see your charts, but I’m taking what you’re saying with a huge dose of skepticism,” he said. “What’s changed (since those letters were written)? The same CEOs are still here. PSR is still here.”

The federal regulator called the hearing earlier this spring after receiving a cascade of complaints from shippers about poor rail service — so many in fact that the STB is looking at making it easier for customers to ask for “emergency service,” which would force railroads to move freight by any means necessary. Testimony began Tuesday morning, with union officials, railroaders and shippers complaining about how in their view PSR has put profit ahead of customer service and employees.

“This is not a pandemic-related issue. We’re dealing with years of cuts that have gutted the rail network that’s making these service issues inevitable,” said Chris John, President and CEO of the American Chemistry Council. “Precision Scheduled Railroading is just doing less with less.”

Late Tuesday, top-level officials from NS and CSX went before the board to defend themselves. The executives explained that the pandemic was an unprecedented event that was hard to plan for and that they’re still trying to recover from that. But perhaps more challenging was that it has been harder to hire the employees they need to move freight. During the first part of executive questioning, things remained civil, but the atmosphere became considerably tenser when CSX CEO Jim Foote — who was not on the hearing schedule — made an appearance as the hearing dragged on into the evening. Foote has become a familiar face before the board in recent months, having testified at hearings regarding passenger service on the Gulf Coast and CSX’s takeover of Pan Am Railways.

One particularly testy exchange happened between Foote and STB Board Member Robert Primus. Foote said that CSX was hiring people as quickly as it could. But when Primus asked just how many people the railroad would hire this year, Foote said he couldn’t give a specific number.

“As the head of the company, you should know,” Primus said with frustration.

At another point during the exchange, Foote suggested that one-person crews — a controversial practice in the eyes of railroaders and union officials — could be the solution to the current service crisis.

“Let us run trains with one employee and this problem is solved,” Foote said.

While the exchanges were at times tense, Primus did thank Foote for being the only CEO to show up to the hearing.

At the start of the second day of testimony, the STB again heard from more shippers and union officials about what they were experiencing in the field. Then after lunch, Union Pacific and BNSF officials appeared before the board. Again, the officials testified that service was not up to their own standards but that they were doing what they could by bringing back furloughed workers, hiring more employees (3,000 at BNSF and 1,400 at UP) and taking more locomotives out of storage. Matt Garland, vice president of transportation for BNSF, also took the time to defend the railroad’s controversial “Hi-Viz” attendance policy that went into effect in February. Garland said the railroad had not updated its attendance policy in more than 20 years and that BNSF felt it needed to so that it had enough people to handle the traffic. He specifically noted that the policy has increased crew availability on weekends. He also disputed a union claim that hundreds of employees have quit because of the new policy.

During the question and answer period, Oberman asked officials from both railroads why they had made such deep cuts to their employee ranks even before anyone had heard of COVID-19 and the resulting economic slowdown. Oberman also asked if technology like Trip Optimizer, a fuel savings technology that limits speed and throttle use, was also having an impact on network fluidity. He noted that during the previous day’s testimony, union officials shared with the board a memo that stated BNSF was temporarily eliminating the use of Trip Optimizer. Garland said that Trip Optimizer was helping the railroad achieve its sustainability goals but that it was normal to stop using it when the network was congested. Oberman wasn’t convinced.

“We’re all concerned about the environment but I don’t think it helps the environment if your trains are going so slow that customers have to put their freight on a bunch of trucks,” he said.

Later Primus thanked the BNSF and UP officials for showing up “before the firing squad” but expressed frustration that neither railroad’s CEO had made the time to testify.

“This is the most serious issue before the board,” Primus said of the ongoing service crisis. “I’m disappointed that neither of them showed up because the buck stops with them.”

Canadian Pacific and Canadian National officials were the last to speak. STB officials noted that service issues on their networks have not been as severe as the situation on the U.S.-owned roads and that they were not required to be there but appreciative that they were.

This article was posted on: April 27, 2022

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| 2652 views | | 17 replies (last )
Post ID: @OP+1gtYj530

17 replies (most recent on top)

I predict few if any substantive changes. As long as there's more money to be made continuing as they are, why would they change? This company, and the other Class I's, are big enough that fines are just a cost of doing business and for many industries they are the only real option no matter how bad the service.

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Post ID: @ljde+1gtYj530

Finally. The HH PSR RR business model being called on the carpet. But there has been a LOT of damage to the industry. Looks like the class 1’s are going to fire up the “fauxgorithm” machine in order to be ready for the Zoom meetings.

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Post ID: @bmje+1gtYj530

https://www.bcg.com/publications/2020/going-beyond-precision-scheduled-railroading

Speaking of hedge funds, they have these overpriced consultants in their back pocket to help lead the way and infiltrate board seats to direct the company towards more profitability (for the shareholders) If NS starts to lose control of the OR look for them to pay a corrupt consulting group like BCG and further line shareholder pockets. Go down the rabbit ho-e of hedge funds and consultants like BCG, you'll see a lot of similar tactics.

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Post ID: @bnme+1gtYj530

https://www.railwayage.com/regulatory/stb-to-class-is-industry-wide-transparency-accountability-and-service-improvements/

You thought the administration that is ran by hedge funds was going to do something to cost the hedge funds money in any way?

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Post ID: @abnr+1gtYj530

Well Shaw IS the marketing guy, so it makes sense he is giving TV interviews instead of showing up at STB hearings.

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Post ID: @5dmw+1gtYj530

Yea it's a publicity stunt for good press to cover up the negative sentiment from the STB hearings and all of the unions tearing into them.

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Post ID: @5rdf+1gtYj530

In fairness Shaw was busy in TN visiting a local show pretending he knows or cares about the average worker, you know, the one that actually makes them money.

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Post ID: @5rrp+1gtYj530

Jim Foote was interesting, he was getting so upset at the simple question about staffing levels. He either can't handle pressure well or feels he is above being questioned. Likely the being above it. He got into some really testy and sarcastic exchanges, can you imagine working for him and how he treats his subordinates?

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Post ID: @4arb+1gtYj530

From NS we had Cindy Sanborn, Baldy Chuckles and The Shrew on their panel. Sanborn gave the company line, lying through most of it but most avoiding direct answers, Chuckles gave the comedy relief as the bright and gregarious one who also made stuff up and The Shrew spoke in a monotone repeating company propaganda. As Olberman pointed out, neither CEO Squires or Shaw could show up to this meeting (obviously they are above that) and NS refuted that Trip Optimizer was an issue with running trains because PTC would "stop then anyways" if they were going too fast on mainline with something ahead of them. Which was the most ridiculous thing I have ever heard, it's like saying you will only do 40 on the interstate because eventually you are going to run into traffic or a toll gate. NS as usual "per Cindy Sanborn"came off as arrogant, uninterested in changing and had excuses for everything. They have no interest in changing their business model to correct the problems, which is why Congress and the STB need to ensure Common Carrier Compliance or maybe even partially regulate the railroads somehow more than they have been.

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Post ID: @4vqm+1gtYj530

Having watched the scathing testimony from shippers and labor it would be hard to believe change isn’t coming . On day two the gentleman speaking on behalf of labor spoke for 20min about the response of the class 1’s . It was said Who you going to believe the customers / labor or the class 1’s . One is bragging about Record profits and $10B stock buy backs ? Yet the ones who do the actual work and the the customers who pay the bills are not happy . It’s past due that these railroads receive the attention they deserve . Dividends have consequences. Corporate greed has brought attention to the steps of Washington. The class 1’s have successfully in my 28yrs united both labor unions in this fight . These railroads have always enjoyed this divide and conquer mentality. Railroad work is a silent service and even in a pandemic where often overlooked.Gone are the days of “ Furlough them they always come back “ Rightfully we are getting the attention we deserve and a platform to hear our voices .

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Post ID: @1cpk+1gtYj530

Its pretty astonishing that after the STB and the shippers see through the smoke screen that PSR is nothing more than doing less with less, Foote is still pushing for a one man crew. Unbelievable.

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Post ID: @1dpt+1gtYj530

https://railfan.com/execs-respond-to-criticism-as-tense-rail-service-hearing-continues/

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Post ID: @1pjt+1gtYj530

They run it now. Look at the waist and stupidity. Just like the government.

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Post ID: @wga+1gtYj530

The government should nationalize the railway system and run it like the interstate highway system.

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Post ID: @kes+1gtYj530

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