Employment numbers with the U.S. operations of the Class I railroads in mid-November were the highest since the start of the COVID-19 pandemic in North America, according to data collected by the Surface Transportation Board.
However, some are questioning whether some aspects of other employment data collected by the board truly reflect the state of employment in the industry. There is also a broader question of whether the pace of hiring is going fast enough to surpass pre-pandemic levels.
In November, the number of employees working for the Class I railroads totaled 118,944, which is above May 2020 but below the total of 124,430 in April 2020, during the early days of the pandemic in the U.S. November’s total is also a 4.4% increase year over year (y/y) and a 0.62% increase sequentially.
Of that overall total, head count within the train and engine (T&E) category was 49,934 in mid-November, also the highest since March 2020. The total in March 2020 was 51,801 T&E employees. T&E crew head count is significant because the category historically moves up and down in relation to market demand.
November’s T&E head count was 6.29% higher y/y and 0.74% higher than October 2022.
“Rail labor additions remain resilient as Big 4 U.S. rails grew employee counts +0.7% M/M in November (+4.4% Y/Y). Now each of the Big 4 have grown headcount sequentially 4 straight months for the first time in our 25-year history of monthly employment data,” said Bascome Majors, Susquehanna Financial Group transportation analyst, in a note last Wednesday. Majors was referring to BNSF (NYSE: BRK.B), Union Pacific (NYSE: UNP), CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC).
“With BNSF and CSX each growing T&E headcount +1.5% sequentially, three rails have grown T&E workforces 10%+ cumulatively since January, while UNP’s +3% remains the 2022-TD laggard of the group,” he continued. “As labor uncertainty peaked from Sept to Dec, we’re encouraged by this headcount data, which suggests the rails’ service improvement goals are increasingly likely to be met in 1H23 if there’s no post-holiday setback in Jan/Feb.”
Union’s attorney questions head count figures
The increase in head count among the big four U.S. Class I railroads comes as an attorney representing several craft unions questioned some of the data submitted to the board.
The Class I railroads’ employment data submissions include the data points referenced above, as well as employment data that is part of the service-related metrics requested by STB in May. STB sought the data to gauge the efforts that the railroads are making to improve rail service.
Richard S. Edelman, representing six unions, submitted a Dec. 12 filing to STB telling the board that he believed that the figures submitted to the board as part of the service-related data is hard to analyze.
“Although the carriers began to file their reports in response to the Board’s Order in this Sub-docket, many were unilluminating, and many were misleading. And service did not meaningfully improve,” Edelman said.
Edelman submitted the filing to Ex Parte 772, which is the proceeding that looked at UP’s reasoning for increasing its use of embargoes over the past five years.
He also said several unions submitted comments in June saying that it is difficult to determine hiring trends by location using the data given to the board. These unions recommended that STB require the railroads to provide the information on a historical basis, provide figures of those who are in training and give information on the number of people leaving employment, among other requests.
“The carriers continued to provide employment data that was not reported in a useful or even comprehensible manner. To the extent that the carriers provided summaries or explanatory material, they generally contended that they were recruiting and hiring and increasing their workforces, particularly Operating Craft employees. This conflicted with the actual experience of the unions that represent the carriers’ employees,” Edelman said. “At the same time, shippers continued to complain that service had not improved and that the reports on service metrics were inaccurate and misleading; and that carrier summaries and explanations that portrayed progress with regard to service were inconsistent with shipper experience.”
The employment data provided to STB also conflicts with union data based on their membership rosters, according to Edelman.
“The Unions’ membership numbers are truly demonstrative of the numbers of individuals employed by the carriers in the crafts/classes represented by the Unions because they include actual, continually employed, workers who are paying union dues; and they are not inflated by trainees who do not actually start and maintain careers in the railroad industry. The membership numbers do not show significant increases in membership or even real increases in membership,” Edelman said.
Edelman reviewed some of these points with STB at the board’s hearing on UP’s embargoes on Dec. 13.
“There’s a lot to unpack in what you said,” said STB Chairman Marty Oberman in response to Edelman’s presentation at the hearing.
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