Many goods are carried by the freight train network in the United States. Yet, several factors are converging that could lead to a disruption of freight service:
In April, the STB held hearings on the meltdown, where representatives from sectors including agriculture, energy, and chemicals joined trade unions to complain of poor service and working conditions. STB data says railroads cut their workforce by 45,000, or 29 percent, over the past six years, with pandemic furloughs pushing staffing levels past a tipping point. By late May, only 67 percent of trains arrived within 24 hours of their scheduled time, down from 85 percent pre-pandemic, according to data submitted to the STB by the four largest US freight railroads.
Worse, the US freight rail system is now poised on the brink of total paralysis because of a contract dispute between 115,000 rail workers and their employers. Negotiations have dragged on since the last contract expired in 2019, during which time rail workers have not had a raise. Under the Railway Labor Act, federal government mediators try to prevent railroad work stoppages, in this case to no avail. On August 16, a three-member presidential emergency board appointed by President Biden issued recommendations for the basis of a new contract. If the sides don’t reach agreement by September 15, rail workers can strike—a scenario that Rick Paterson, a rail analyst at the investment firm Loop Capital Markets who testified during the STB hearings, calls “economic WMD.”
The fallout of a prolonged strike would likely eclipse those from pandemic delays to ocean shipping because a foundational component of many supply chains would see its labor supply evaporate overnight, says Paterson. Ports would jam; trucking rates would soar; livestock would run out of feed. For that reason, Congress would likely intervene to delay or quickly end a strike, as it did during the last railroad strike in 1991. But lawmakers may not have much time: The deadline is just three days after the House of Representatives returns from recess…
US freight railroads cut staff in recent years as part of a shift toward a leaner and more profitable operating model dubbed Precision Scheduled Railroading (PSR). It was invented by a Canadian railroad executive and later replicated in the US, with the intention of simplifying a complex rail network by running fewer, longer trains, replacing single-commodity trains with mixed freight, and slashing labor. US freight trains grew 25 percent in length between 2008 and 2017 and now sometimes reach 3 miles long. And while the profits materialized, the promised service improvements have not always followed.
As with much critical infrastructure, relatively few Americans pay attention to its operation outside of the ways it might affect their daily life. See one recent example involving freight lines from the Chicago suburbs. If the trains keep running on time – or close to on time – it will not attract much attention.
But, a day without freight trains would quickly lead to big issues. Some might notice it quicker than others; perhaps they are associated with a certain industry or business or they live in a community where freight trains are ever-present and/or vital.
Given the stakes described above, I assume the crisis will be addressed and the trains will keep running. However, getting past this moment is not necessarily the same as setting up a structure that works for an extended period of time.