The Perils of Precision Scheduled Railroading

Although almost all of the Class I railroads have been deploying precision scheduled railroading (PSR), an operational model that seeks to streamline operations, for several years already, a number of issues keep the debate over its value alive.

The railroads have argued that PSR provides shippers with consistent and reliable service. Proponents of PSR contend that shippers previously had to wait until a train was long enough in order for them to receive service, making service more erratic. Having that stability helps freight rail become more trucklike, they say. Implementing PSR has also helped the railroads lower their operating ratio, a gauge derived by a formula that helps investors determine the financial health of a company.

But the unions representing craft employees and train and engine crews — the Brotherhood of Locomotive Engineers, SMART-TD, Transportation Trades Department of the AFL-CIO, the Brotherhood of Maintenance of Way Employes, among others — generally have been skeptical of PSR, in large part because the operational model also seeks to cut costs, and one way to cut costs is to reduce employee headcount. Since 2016, the yearly average of those employed by the U.S. operations of the Class I railroads has fallen roughly 25%, according to data submitted to the Surface Transportation Board.

The yearly average of the total number of employees working for the U.S. operations of the Class I railroads. The 2021 average is through June.

The rail unions argue that PSR's emphasis on adhering to a strict train schedule jeopardizes the ability of workers such as signal maintainers and carmen from doing a thorough inspection. They also argue that the job cuts have been too deep, resulting in a freight rail industry that doesn't have enough network capacity for when rail volumes grow or when congestion issues arise in the supply chain.

"They want to run the leanest railroad they could possibly run to produce historic operating revenues to entice investors," said a freight rail policy expert with one of the unions. But "the railroads are running themselves so lean that they are only capable of the railroad of today. They are not capable of running railroads when there are economic shocks or changes in shipping patterns."

Union members also believe that rail derailments, such as the September fatal derailment involving an Amtrak train running on track owned by BNSF (NYSE: BRK-B), have increased in recent years.

According to the Federal Railroad Administration, most derailments occur within the confines of rail yards and not on mainline track.

	CY 2012	CY 2013	CY 2014	CY 2015	CY 2016	CY 2017	CY 2018	CY 2019	CY 2020	CY 2021 (through July)
Derail-ments	1,294	1,311	1,322	1,351	1,212	1,274	1,377	1,335	1,083	574

Source: Federal Railroad Administration

The debate about PSR comes as 12 labor unions and 30 freight railroads are in the midst of a multiyear effort to negotiate and reach a collective bargaining agreement that will last for several years. The agreement will address wages, benefits and health care, and workplace safety and operating rules, according to the Association of American Railroads, the trade group representing the Class I railroads.

Below are some thoughts about PSR from two union members who argue that PSR is squeezing employees' abilities to perform their roles fully.

‘We all know that things aren't getting done'

Randy has been working as a signal maintainer for a Class I railroad for nine years. His full name hasn't been disclosed in order to protect his identity.

As a signal maintainer, Randy conducts monthly and quarterly inspections of the signals at railroad crossings and at other areas within his assigned territory. The inspections involve adhering to standards developed by the FRA.

When Randy first started, the railroad treated him and his colleagues well.

"Everything was great. I really can't say enough good things about how they treated us in the beginning," Randy said.

Things started to change when his railroad implemented PSR, according to Randy. One of the biggest changes has been the declining number of employees working for the railroad, coupled with greater responsibilities for each remaining worker. The territory that each signal maintainer was responsible for grew, while the managers overseeing the work of the signal maintainers are also responsible for ensuring that a greater amount of territory is being properly inspected, according to Randy.

Another change is PSR's impact on the timing of the inspections, according to Randy. Because the trains run on a fixed schedule, the dispatchers are reluctant to give the signal maintainers the time they need to conduct a thorough inspection because they don't want to delay the trains. Meanwhile, the signal maintainers feel pressure to get all their inspections completed, Randy said.

"When you stretch them thin, in my eyes … a lot of those maintainers are going up to those gates and saying, ‘It was working fine the last time. Let me just write the paperwork up.' Because you just ain't got time to get it all done," Randy said. "We all know that things aren't getting done."

Randy believes that the railroads will start to hire more employees again because they need more crews to ensure that tracks and the network are functioning well.

"I can tell you beyond a shadow of a doubt, railroads that are running PSR — it's just a matter of time before the track is in such disrepair that they just don't have a choice but to hire more people and start going back. … Me personally, I just see PSR as a temporary thing because it just can't work," Randy said. When a train that weighs 20,000 tons is running across the rail, "it's going to break stuff eventually."

‘Many things go undetected and it's starting to show'

Jason Cox says he sees a lot of deferred maintenance occurring among the Class I railroads as a result of PSR.

Cox, who has 25 years of railroad experience, started his career with Norfolk Southern NSC in 1998. After being furloughed there, he worked for CSX CSX. Now he works full time for the union as a general chairman for the Brotherhood of Railway Carmen. Carmen are those who inspect and repair railcars.

Cox says the deferred maintenance comes from the railroads' decision to shutter multiple inspection points in order to streamline their operations and gain efficiencies. But closing those inspection points means that railcars are running longer miles between inspections. Furthermore, some railcars are being inspected by train crews besides carmen, and those crews aren't trained to inspect to the standard that a carman has been trained, according to Cox.

"Many things go undetected and it's starting to show," Cox said.

Cox argues that carmen aren't given enough time to inspect the railcars because of the drive to keep the trains' schedule. Inspectors used to take up to three minutes per freight car but have now been encouraged to take one minute per car, according to Cox. That time includes the amount of time to walk around the equipment, he said.

Cox also says there is a growing emphasis on focusing on certain elements of the inspection, such as inspecting the couplers that connect railcars together. While inspectors should examine that, the time constraints prevent them from thoroughly examining safety appliances such as ladders and crosswalks. This practice endangers railroad workers, he says.

"I think they need [to give] their employees the time to safely inspect this equipment. I believe that the inspections that they're relying on from train crews who are not trained to the standard of the carman [should] be returned back to the carman because they're the ones who are highly trained and highly specialized, and they're able to make the determination on the condition of these cars," Cox said.

The condensed inspection time frame is resulting in employee burnout, Cox said. Furthermore, since there are fewer workers inspecting the cars, that means that the remaining carmen have more work to do and more overtime to complete. And as the need for network capacity grows, so does the workload, Cox said.

"The volunteers for overtime are completely burnt out that they cannot work any more overtime, and now" the railroads are forcing overtime, Cox said. "Members have submitted reports to me that they're so tired that they worry [about] getting killed or missing a major defect."

What could help carmen and help the railroads improve safety practices is to reactivate inspection points so that they can go back to the repair shops soon, according to Cox. He believes that allowing time for a quality inspection to find defects will result in people wanting to come back after they've been furloughed.

The utilization of technology should also enhance inspectors' safety practices, not replace the efforts of inspectors, according to Cox.

"The evolution of technology in large part has been good for the railroads [but] they want to use the technology to keep the status quo. … Technology should not supplant — it should work with [people] to allow it to do what it was designed to do, [which is] make the railroad safer," Cox said.

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