Execs Respond to Criticism As Rail Service Hearing Continues

U.S. Surface Transportation Board 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