Business Railways are cutting workers at a pace not seen...

Railways are cutting workers at a pace not seen since the Great Recession

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When Hollandsworth closed the locks and removed the coats, hats, power tools and rule books from the company of his former co-workers, he couldn't help feeling that the layoffs were different this time. Unlike the past, his colleagues probably won't return.

"When you go to work now, it's like entering a funeral home," said Hollandsworth. "What three people used to do, one person is doing now."

While the US economy UU. In general it is growing moderately, the rail industry is a warning sign of the continuing pain in the industrial sector and the profound structural changes in the economy that are eliminating middle class jobs.

President Trump's trade war has severely affected agriculture and manufacturing, causing less demand for companies that move merchandise. But railway stocks skyrocketed in 2019 after railway executives adopted automation and cost reduction to remain profitable, doubling the idea that the future of the railroad involves longer, faster and less worker trains.

More than 20,000 railway workers have lost their jobs in the last year, the largest railway layoffs since the Great Recession and a decrease of almost 10 percent in rail employment, according to data from the Department of Labor until November.

The volumes have dropped so much in the main American railroads in the last year that some economists say that the nation is in the middle of a "recession of load".

Freight declines have generally foreshadowed problems for the economy in general because they are a barometer of the amount of things that are directed to the market. Every economic recession since World War II has been precipitated by freight traffic. There have also been periods like 2015-16 when manufacturing, road and rail transport suffer, but the rest of the economy continues to grow.

The fall of today's railroads is partly a consequence of the trade war and partly the result of long-term trends such as the United States becoming less dependent on coal, experts say. But job losses are exacerbated by the adoption by the new technology industry and a recently efficient technique of directing rail traffic known as Precision Scheduled Railroading, or PSR, which is transforming the business economy.

"I've never seen conditions like this in my 45-year career," said Jim Blaze, a railroad economist. "I am calling this a cargo recession for railroads and truck companies, but there is this trade uncertainty. This cloud This fog It is difficult to predict whether we will slip into a general economic recession."

November marked the tenth consecutive month that rail freight deteriorated with respect to stellar traffic levels last year. Freight wagon loads dropped 7.4 percent in November compared to the previous year, according to data from the American Railroad Association. The decrease in volume is similar to what happened at the end of 2015, although job losses are worse.

But now, the leaders of the railway industry are cautiously optimistic. They prevent a rebound once Trump finalizes trade agreements with China, Mexico and Canada and if he submits his "fee man" instincts in an election year.

“For our industry, commerce has become a big part of what we do. Probably in the range of 35 to 45 percent of our business, "said John Gray, senior vice president of politics and economics for the American Railroad Association, the industry's main trading group.

But even if Trump's commercial war declines, it is unlikely that many of the $ 70,000 maintenance and management jobs will return annually.

The rail industry, which once employed more than one million Americans, fell below 200,000 employees in 2019, the first time this has happened since the Department of Labor began tracking rail employment in the decade of 1940

"We fundamentally changed the way we operate in the past two and a half years," said Bryan Tucker, vice president of communications for CSX. "It's a different way to drive a railroad."

A spokeswoman for Norfolk Southern said the company was focused on increasing efficiency and profitable growth and that "as our business changes, so do the needs of our staff." Union Pacific emphasized the environmental benefits of moving goods by rail instead of trucks.

Even if the business recovers, the acceptance of PSR by the industry promises to contain the need for more workers. Freight railroads used to run trains carrying only one type of good, and trains could sit in yards for hours or days until they had enough cargo to justify departure.

Now, after PSR, the railroads are running more trains with mixed products and at a set schedule that leaves regardless of what happens. The goal now is to minimize unemployment and use the same locomotive and crew as much as possible, similar to how the same plane constantly travels between the Washington area and New York City.

Rail executives say these changes are providing a more reliable service that can compete better against trucks. PSR has the help of new technologies such as drones and artificial intelligence to monitor the tracks and send alerts to customers about train locations.

But PSR is also causing the railways to reject some businesses that are not profitable enough, says Peter Swan, an associate professor of logistics at Pennsylvania State University in Harrisburg. Some routes have gone or have been reduced.

"Railroad shareholders are seeing the financial success of PSR and now every major railroad is trying to adopt some form of this," said Swan. "If you're trying to save money, you cut people like crazy."

Canadian railways adopted PSR more than a decade ago. The strategy has been consolidated among the main freight railroads of the USA. UU. Since 2017, as executives sought a way to increase profits to compensate for the decline in coal traffic and the recent slowdown in the industrial economy.

Wall Street has applauded the changes, noting that this could be a model for other industries facing difficult times. Norfolk Southern and Union Pacific shares rose 30 percent last year, and Kansas City Southern shares rose more than 60 percent. Profits were better than the general market.

Roanoke looked like a parking lot for locomotives just before Thanksgiving, an unusual sight at a time of year that is usually the peak shipping season. Workers say the peak never came in 2019.

According to economist Blaze, the seven main freight railroads have left almost 30 percent of the locomotives inactive in the last year, as they aim to operate fewer, but longer, trains.

Hundreds of black locomotives with the Norfolk Southern logo are parked consecutively on the tracks that run through Roanoke's heart.

The workers in this long-standing railway center are nervous, saying that this feels different from past rail recessions. Now the cuts are happening to people up to a decade old. And maintenance and repair workers in rail yards, long considered some of the safest roles, are also being laid off.

David Earick was eight years old with Norfolk Southern in Roanoke as a pipe installer, a job similar to that of a diesel mechanic.

Earick lost that job in April, but chose to cut wages to continue working as a railroad worker. Then Norfolk Southern eliminated that paper in September.

“They told me that this permission was indefinite. You will not receive a callback, "said Earick, 32." My wife is going crazy. We just had our first child in July. "

Earick said he used to love his job. "People always thought it was the best when you told them you worked in a locomotive," he said, but now he is looking for work.

Rail workers rarely talk to the media for fear of losing their jobs, but more than a dozen spoke with The Washington Post, mainly due to concerns about how PSR is changing the industry the way they say it causes unnecessary loss. of jobs and creates an insecure environment. .

"It has always been done more with less, but now it is done more with less to the absolute extreme," said a driver in eastern Kentucky who spoke on condition of anonymity for fear of reprisals by CSX.

While layoffs have occurred in almost every facet of the rail business, the biggest cuts have been in the driver and maintenance ranks, according to detailed monthly data that the seven main freight railroads provide to the Surface Transportation Board.

Rail executives say PSR improves on-time delivery for customers. They point out a safety record that shows that the industry is much safer today than two decades ago, although there have been several major derailments in recent weeks.

"What they (customers) are getting in terms of quality of service today is off the list," James M. Foote, president of CSX told investors at an investment conference in November in Tennessee. He noted a "dramatic" improvement in on-time delivery to around 90 percent, compared to 50 percent before the PSR.

Multiple rail executives took the stage at the Stephens Nashville Investment Conference that month to emphasize that while rail volumes were reduced, the employee count and other costs were further reduced, ensuring that companies remained highly profitable.

Norfolk Southern saw a volume decrease of 6 percent, but crew costs were reduced by 13 percent, said Alan Shaw, the company's marketing director. He called it "good productivity" and said the company was "accelerating" this strategy by 2020.

Another key part of the efficiency boost is running longer trains. The average train length has increased 25 percent since 2008 to approximately 1.4 miles, according to a report from the Government Accountability Office published in May.

Workers across the country report an increase in the hitch of two trains on their routes.

"They discovered that they can hook two trains and cut a crew," said a Union Pacific engineer based in Cheyenne, Wyo., Who spoke on condition of anonymity for fear of his work.

He recalled a recent episode when “there was one with 220 cars, approximately 3 miles long. It was huge and there were only two people working on it.

A Union Pacific spokeswoman said the average train length is approximately 1.5 miles.

Workers say they are concerned that radio signals sometimes pass between the front and back of long trains and that Americans do not like to wait for long trains to pass.

"We are seeing 2½ mile long trains daily," said Jeremy Ferguson, president of SMART TD Union (short for International Association of Sheet Metal, Air, Rail and Transportation Workers, Transportation Division). "It is a big problem. It is very difficult for the operational teams and the towns and cities through which we operate. It is not safe to have railroad crossings blocked so long."

There are ongoing negotiations between the main unions and railway companies.

Some carriers would like to reduce typical personnel on a freight train from two (one driver and engineer) to one. Fully automated freight trains began operating in Australia about a year ago, a possible precursor to what is to come.

"I have been one of the lucky few who have never been fired," said Hollandsworth. "Now I come in every day wondering if this is so."

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