Norfolk Southern acknowledged that a workforce shortage contributed to service issues in the Southeast and in parts of the mid-Atlantic region in September and October, according to a recent letter to the Surface Transportation Board. But the railroad says it is seeking to grow its train conductor ranks to improve service.
“We recognize our current service levels do not meet our customers’ or our expectations. We also understand the critical role we play in supporting our customers’ business plans and the national economy,” said NS President Alan Shaw in a Friday letter to the board. “We are in business to provide an efficient, reliable transportation service, and we are highly motivated to restore the level of service our customers expect and handle higher volumes of their freight. Recovering our service is our highest priority, and we assure you we are taking action to achieve this as quickly as possible.”
STB Chairman Marty Oberman asked NS last month (NYSE: NSC) to respond to concerns that the board has received over deteriorating service.
Shaw responded last week that NS is “experiencing meaningful workforce shortfalls in critical portions” of its network, with the shortfalls concentrated in Birmingham, Alabama, as well as along a stretch between Cincinnati and Chattanooga, Tennessee. There are also shortalls on a portion of NS’ southern tier between Buffalo and Binghamton, New York.
This has resulted in yard congestion in Birmingham and Chattanooga, as well as slower train flows in the areas mentioned. The service issues in turn have created collateral impacts elsewhere, Shaw said.
“We have suffered unexpectedly high rates of attrition in these areas, which spiked during late September and October. These attrition rates have been compounded by hiring challenges, as the entire transportation industry, along with other sectors of the economy, face an unusually tight and rapidly evolving labor market,” Shaw said.
Shaw said NS has made “substantial progress” during the slower Thanksgiving holiday period, with improved yard operations in Birmingham and Chattanooga, as well as improved traffic flow brought about by the redeployment of manpower and the reworking of crew districts between Cincinnati and Chattanooga.
NS acknowledged there are still network challenges at the southern tier although it is seeking to improve traffic flows there.
The railroad also said it is seeking to increase the number of train conductors in NS’ workforce, after having made headcount reductions at the onset of the COVID-19 pandemic. It had 285 employees in conductor training as of Dec. 6, which NS says is the highest level year-to-date of conductor trainees, and it has 939 prospective employees.
NS plans to “dramatically” expand conductor training class sizes in the first quarter of 2022, as well as increase its hiring rate to counter higher attrition levels. It is also offering bonuses and incentives to prospective and current employees.
“We fully intend to improve the quality of the service we are providing to our customers. While we are making progress, it takes time to onboard and properly train new employees to make a safe and effective contribution to our business,” Shaw said. “Safety is an important value at Norfolk Southern, and we are committed to preparing our employees to perform their duties safely. Until we can deploy new hires in sufficient numbers to counteract the unusually high attrition rates in some areas of our network, our ability to deliver the strong service product our customers are accustomed to receiving from us will continue to be under pressure.”
He continued: “While we always stay close to our customers, we recognize that doing so is especially critical when our service is challenged. We are committed to remaining in constant communication with them with clear feedback on our service capabilities and limitations so they can better manage their supply chains.”
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