STB’s Oberman pens letter to Class I railroad CEOs, regarding service concerns

Earlier this week, Martin Oberman, Chairman of the Surface Transportation Board (STB), an independent adjudicatory and economic-regulatory agency charged by Congress with resolving railroad rate and service disputes and reviewing proposed railroad mergers, issued letters to leadership to all seven North American Class I railroads, calling for updates on their preparedness to meet demand for rail service amid the ongoing economic recovery from the COVID-19 pandemic.

A key theme of Oberman’s letter focused on concerns regarding recent rail service issues reported by some shippers, adding that it may relate to a broader trend of rail labor reductions over the last several years, coupled with the pandemic-driven furloughs and quarantines.

In the letter Oberman explained that while railroads are providing shippers with consistent and durable service, the STB “has also received concerning reports from a meaningful number of rail customers of subpar performance, including missed switches, railcars delayed at intermediate yards or interchanges, extended out-of-route movements, and prolonged dwell at origin for some unit train traffic.”

What’s more, he also cited reports of delayed train arrivals and disruptions to container availability.

“I recognize that these rail service challenges, at least to some extent, have been related to workforce reductions resulting from COVID-19 cases, quarantines, and furloughs based on the temporary decline in demand and the resultant adjustments made by railroads in nearly every facet of their businesses,” he wrote. “But I am also concerned by the extent to which these service issues may be related to or exacerbated by a broader trend of rail labor reductions that has been occurring over the past several years. As you know, a lack of personnel, including reserve personnel, makes it more difficult to scale-up operations to respond to increases in demand and to maintain reliable service in the face of unanticipated external events that disrupt ordinary operations or business expectations. Labor shortages can also delay or prolong the recovery period when such network disruptions inevitably occur.”

Oberman said it is vital for freight railroads to continue frequent, proactive communication with the STB and shipper customers regarding their ability to meet demands for service as the economy continues to recover.

And he said he is requesting an updated and detailed description of railroads’ preparedness to meet anticipated future demand, including:

• the availability of train crew, yard, and maintenance employees (active, reserve, and furloughed workers) and their respective plans and time frames for employees to return to work and any re-training, if necessary; and
• the availability of equipment resources (active and short-term / long-term stored locomotives and rail cars)

“As part of this update, I am specifically requesting that you also address whether you have any long-term plans, including your hiring plans for 2021 and 2022, to reverse any of the diminishing workforce levels which have resulted from your strategies in recent years,” he wrote. “Also, please identify any regions of your network where you are experiencing or anticipating workforce challenges, and your plans to overcome these challenges.”