The average number of employees working for the U.S.-based operations of the Class I railroads for the first three quarters of 2023 is roughly flat to lower compared with the same period in 2020, according to data collected by the Surface Transportation Board.
But when comparing those two periods, only two rail employment categories from within that total number grew: the train and engine (T&E) category and the category for executives, officials and staff assistants.
On average, the U.S. operations of the Class I railroads had 121,649 employees on staff from January to September, compared with an average of 121,819 employees for that same period in 2020.
Between March and April 2020, the Class I railroads had slashed the number of employees working for them in response to the COVID-19 pandemic and lower market demand. The railroads aggressively sought to restaff their ranks in 2022, in part because of pressure from regulatory officials who believed there might be a link between lower head count levels at the railroads and subpar rail service.
Potential reasons behind rising and falling employment categories
STB’s employment data has six categories for rail personnel: T&E crew members; professional and administrative; executives, officials and staff assistants; maintenance of equipment and stores; maintenance of way and structures; and transportation employees outside of the train and engine category.
For the T&E category, which can be sensitive to market demand, the average number of employees for the first three quarters of 2023 was 51,580, about 8.5% higher than an average of 47,542 employees for the first three quarters of 2020.
Increases within the T&E category were partly in response to scrutiny from regulators and other industry stakeholders such as shippers and rail unions, which had criticized the railroads for cutting back on their head counts too deeply in their pursuit of precision scheduled railroading, a method that seeks to streamline operations and cut costs. Increasing the number of train and engine crews would enable the railroads to meet demands for service, they argued.
Growing the ranks of train and engine crews became a priority for the Class I railroads in 2022, according to comments during earnings calls and as seen in STB data for T&E employees.
But the T&E category was only one of two categories that showed growth when comparing the average head count levels for the three quarters of 2023 with the first three quarters of 2020.
Average head count for those involved in the maintenance of equipment and stories fell 13% from 20,826 for the first three quarters of 2020 to an average of 18,090 for the first three quarters of 2023, according to data from STB. Head count for those involved in the maintenance of way structures fell 4.6% from an average of 30,116 to 28,738, while for transportation workers beyond T&E, head count slipped 5.9% from an average of 4,884 to 5,190. Meanwhile, head count for professional and administrative staff dropped 3.6% from an average of 10,579 to 10,194.
For executives, officials and staff assistants, head count grew 7.9% from an average of 7,566 to 8,164.
A description of the various roles within each of the categories is available here. Roles under the maintenance of equipment and stores category include equipment, shop and electrical inspectors, carmen, electricians, boilermakers and machinists.
One possible reason for the decline in employees in the maintenance of equipment and stores category is that as railroads decide to store and park locomotives, there is less maintenance being conducted on them.
When asked about the decrease of employee totals related to maintenance of equipment and stores, Josh Hartford, special assistant to the president of the International Association of Machinists and Aerospace Workers (IAM) — Rail Division, told FreightWaves that the downward trend has been reflected in IAM’s membership ranks. IAM members maintain locomotives.
Machinist union members in January 2018 working for the U.S operations of the Class I railroads totaled around 7,700 and that number dropped to over 5,100 members in January 2023, according to Hartford, who said membership numbers have flattened out in 2023 at IAM.
But Hartford is concerned that the railroads are not maintaining their locomotive fleet as well as they could be. As an example, he cited the September letter from Administrator Amit Bose of the Federal Railroad Administration to Union Pacific leadership in which Bose noted a locomotive defect ratio of 72.69% when FRA inspectors visited UP’s North Platte rail yard in Nebraska.
UP CEO Jim Vena responded to Bose’s letter, saying that the defect data didn’t specify whether the defects were major, like something involving a high flange wheel, or minor, such as an amnesty lock on a bathroom door. UP also said it takes FRA’s concerns seriously and that UP believes it has the people and practices in place to maintain locomotives and car fleets safely.
While railroads such as BNSF may have contracted out some of the maintenance and inspection work because of challenges in finding a qualified workforce, Hartford doesn’t see that as being a contributing factor to the head count decline.
“We hear all the time that they can’t hire, they can’t find people. I’m just speaking for the machinists. But we’re up over 100 members on Amtrak. How, how can they find employees but the Class Is can’t?” Hartford said.
Whether the Class I railroads decide to grow the ranks for those in the maintenance of equipment and stores category remains to be seen. But the consensus for now seems to be to hold off on significant hiring sprees and look to attrition as the Class I railroads and their customers manage the ongoing economic downturn.
“We look for cost savings on what our input costs are. And of course, it’s much more difficult in the inflationary place that we find ourselves in this country, but we’re going to look for every opportunity to use less so that we can save costs that way. And on head count, absolutely, we’re going to use attrition to rightsize the company as much as we can,” Vena said on UP’s third-quarter earnings call on Oct. 19.
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