Commentary
Written by
Jim Blaze, Contributing Editor
The place are the Class I railroads in enhancing their precise service metrics because the upcoming Union Pacific rail embargo STB investigation comes near its Dec. 13-14 date in Washington? Following are abstract observations and a few unbiased commentary.
Background
The Floor Transportation Board (STB) on Oct. 28, 2022 ordered all Class I railroads to submit weekly efficiency and month-to-month employment information for six further months. That new goal would by Might 5, 2023. The “Massive 4” (BNSF, CSX, Norfolk Southern and Union Pacific ) should additionally submit biweekly service progress studies for one more six months in addition to an interim replace that was attributable to be delivered on or about Dec. 2, 2022. These studies additionally cowl efficiency and labor power targets and any service restoration plan modifications.
Again on Might 6, 2022—a bit of greater than every week after its April 26-27 “Pressing Points in Freight Rail Service” listening to—the STB voted unanimously to problem up to date, more-comprehensive guidelines for reporting efficiency and employment metrics. That eight-part regulation, which largely have an effect on the Massive 4, included submitting of service restoration plans by Might 20, adopted by frequent progress studies and biweekly convention calls with STB workers.
The STB appeared to focus upon directing these 4 carriers to problem extra complete and customer-centric efficiency metrics. Plus, it needed to see extra in-depth railroad workforce employment information (starting June 3, 2022). In essence, the STB took motion to have the ability to, when warranted, tackle the acute service points going through the rail {industry} and “to advertise industry-wide transparency, accountability, and enhancements in rail service.”
The early information initially reported again in Might “revealed intensive service delays and reliability issues … For instance, one service reported failing—greater than half of the time on common—to ship railcars in manifest service inside 24 hours of the unique estimated time of arrival (ETA) … The identical service reported failing—about one-third of the time in a number of working divisions, on common—on its FMLM (first mile/final mile) service … One other service reported failing—greater than one-third of the time on common—to ship grain and ethanol unit trains inside 24 hours of the unique ETA. … The early information additionally confirmed increased re-crew charges than these sometimes seen in periods of much less community stress (i.e., roughly 5%).”
Word effectively that STB did particularly word that whereas “not all Class I carriers are experiencing service issues to the identical diploma, the U.S. rail system is an interconnected community and issues in a single geographic space can shortly unfold elsewhere. The applying of sure reporting necessities to all Class I carriers permits the Board to evaluate the present service points throughout the whole rail community.”
In the meantime, in a logically associated collection of practice efficiency incidents that resulted within the Union Pacific issuing embargoes on sure buyer supplied freight, the Board has now ordered UP President and CEO Lance Fritz and different high UP executives to look at a Dec. 13-14 public listening to on what it’s calling a “substantial enhance” within the Class I railroad’s use of embargoes as a technique of lowering rail site visitors congestion. With out making any pre-conference feedback or hypothetical conclusions, let’s simply check out what a number of the present railroad studies are exhibiting as patterns. We will use that as background notes when the listening to takes place.
What does the general efficiency appear to be, and what’s actually being captured that’s informative to each the regulators and to the rail freight clients? All the information is being submitted topic to the Board’s oversight authority underneath 49 C.F.R. Half 1250.3.
The primary revised information confirmed that the Massive 4 cited presently assembly a few of their six-month targets for service enchancment, and that many key efficiency indicators are trending in a constructive route. Nevertheless, the Board technical evaluate discovered that the submitted information proceed to validate the anecdotal buyer perspective relating to important service points.
Key efficiency indicators now embrace:
- System Prepare Velocity.
- Terminal Dwell.
- First-Mile/Final-Mile (FMLM) switching service (i.e., {industry} spot and pull, ISP.
- Working Stock.
- Journey plan compliance (TPC).
The info evaluate conclusion is that railroad operations stay challenged usually, notably when in comparison with pre-pandemic 2019 ranges. Due to this fact, at the moment, continued SB monitoring is required. Let’s spotlight what every railroad is reporting towards what a few of a number of the rail sector investor analysts are reporting. The info tables are taken from the STB evaluate and up to date determination announcement of Oct. 28, 2022. When reviewing these desk summaries for every service, remember the fact that the goal for enchancment by a lot of them (however not all) is acknowledged because the efficiency achieved again in 2019.
Under are the newest tabular summaries by service as assembled by the STB workers. Then there’s a public commentary supplied by STB close to these report playing cards. Listed here are a number of service definitions as to their aim or goal metrics. The next examples are taken from Union Pacific. Readers are suggested to lookup every service’s definition modifications as a result of one service won’t use the very same definition or math calculations:
UP’s automotive velocity indicator measures the typical each day miles a automotive strikes on the community. Working stock represents UP’s energetic stock minus vehicles positioned at rail person services. UP intends to lower its working stock as a result of UP contends {that a} surplus of working stock is a major contributor to community congestion.
Automobiles per carload represents the working stock required to generate one income carload. It’s calculated by dividing working stock by the typical each day variety of income carloads. UP intends to lower its vehicles per carload metric, which might signify that it’s utilizing fewer freight vehicles to maneuver shipments throughout the UP community. Word that “whole vehicles” seems to additionally to imply shipper-owned/leased vehicles that UP has on its community. Additionally word that the phrases “merchandise” and “manifest” sometimes seek advice from the identical type of combined carload site visitors.
BNSF
STB observations: The BNSF desk above signifies that BNSF has not but met its targets for native service efficiency and common trains holding per day. With respect to OTP, BNSF has been persistently above its targets for intermodal and merchandise site visitors in latest weeks, though BNSF’s efficiency in a number of unit practice classes has fluctuated above and beneath its targets.
In its newest October progress report, BNSF explains that its efficiency ranges for grain unit trains decreased throughout the week ending Oct. 7 as a result of bunching of trains firstly of soybean season. In keeping with BNSF, this fluctuation happens annually and its present efficiency is throughout the bounds of the variability it has seen in recent times. Moreover, BNSF’s latest efficiency exhibits enchancment in comparison with its 2019 velocity and terminal dwell metrics. Nevertheless, latest information for native service efficiency, common trains holding per day, and most OTP metrics point out that these indicators on common haven’t but returned to 2019 ranges.
BNSF labor: For its labor power targets, BNSF acknowledged that it expects to make use of 15,000 T&E workers at six months (15,200 workers in a single 12 months), 8,000 MOW workers at six months (7,800 workers in a single 12 months), and 6,300 MOE workers at six months (6,400 workers in a single 12 months. Nevertheless, the STB discovered that BNSF is way from its T&E goal when in comparison with the September month-to-month employment information on this docket for workers actively on the job.
The STB did go as far as to match, in its Desk 2, BNSF’s progress to each the whole variety of workers on the payroll (as proven in BNSF used information supply) and towards the variety of workers actively on the job. It concluded that as demonstrated in BNSF’s Desk 2, underneath both comparability information set, BNSF has not met its T&E goal. The Board stays as of late October involved with BNSF’s capability to satisfy its goal for T&E workers.
Norfolk Southern
NS recognized system velocity, terminal dwell, native working plan adherence, and on-time supply as its key efficiency indicators. NS acknowledged that, on the finish of the six-month interval, it expects to attain a system velocity goal of 19.4 mph, a terminal dwell goal of 23.7 hours, and a neighborhood working plan adherence goal of 75%. For on-time supply, NS acknowledged that its targets are 61% for merchandise site visitors and 93 % for intermodal site visitors.
The STB concluded in late October that “NS has persistently exceeded its velocity goal in latest weeks, in addition to its targets for on time supply of intermodal and manifest site visitors.” Moreover, NS has met its terminal dwell goal in some latest weeks. Nevertheless, as proven in Desk 5, the latest information present that NS shouldn’t be but persistently assembly its native working plan adherence goal. NS velocity, terminal dwell and native working plan adherence haven’t returned to 2019 ranges.
For its labor power targets, NS acknowledged that it expects to have 7,330 T&E workers at six months (7,543 workers in a single 12 months), 4,206 MOW workers at six months (4,349 workers in a single 12 months), and a pair of,385 MOE workers at six months (2,438 workers in a single 12 months). Nevertheless, as proven in Desk 6, whereas NS has met its six-month T&E and MOE targets when in comparison with the month-to-month employment information submitted on this docket, it has not met its MOW goal, though that determine could also be affected by the seasonal nature of upkeep work.
CSX
CSX acknowledged that, on the finish of the six-month reporting interval, it expects to attain a FMLM goal of 85%, a velocity goal of 23.5 mph, and a terminal dwell goal of twenty-two hours. CSX additionally acknowledged that it expects to attain TPC for manifest site visitors at or above 80%, TPC for mixture unit practice site visitors (together with grain unit, coal unit, automotive unit, crude oil unit, and ethanol unit) at or above 90%, and TPC for intermodal site visitors at or above 95%. Desk 3 is CSX’s reported information used for this STB up to date evaluate.
For its labor power targets, CSX initially acknowledged that it expects to have 7,000 to 7,100 T&E workers at six months (7,000 to 7,500 workers over the following one to 2 years),and 4,905 MOW workers at six months
As proven in Desk 4, STB concluded that CSXT has not met its T&E goal when in comparison with the month-to-month employment information submitted within the docket. Moreover, whereas CSX has not but achieved its MOW goal, CSX has achieved its MOE goal, though each figures could also be affected by the seasonal nature of upkeep work.
The STB supplied this conclusion in its Oct. 28 determination: “Given points raised on this docket, and absent any indication or clarification from CSX on this file that it has modified its goal, the Board is most involved with CSXT’s capability to satisfy its targets for T&E workers.”
Union Pacific
UP recognized automotive velocity, working stock, vehicles per carload, FMLM, and TPC (Journey Plan Compliance as a accomplished supply towards deliberate last ETA) as its key efficiency indicators. UP acknowledged that, on the finish of the six-month reporting interval, it expects to attain a automotive velocity goal of 207 miles per day, an working stock goal of 193,000 vehicles, a system common of vehicles per carload goal of seven.9, and a FMLM goal of 91%. For TPC, UP acknowledged that its targets are 70% for manifest site visitors, 80% for intermodal site visitors, and 81% for mixture bulk site visitors.
As proven in Desk 7, the information point out that UP’s efficiency is persistently beneath its targets for velocity and TPC for intermodal, grain unit, and crude oil unit site visitors. Moreover, UP has not but met its goal for vehicles per carload. In a number of latest weeks, UP’s working stock has been beneath its goal, signifying that it has made some constructive steps in the direction of lowering community congestion.
UP has met its FMLM efficiency goal and its TPC targets for manifest and coal unit site visitors in a number of latest weeks. Nevertheless, UP’s latest information for all indicators (i.e., FMLM, automotive velocity, working stock, vehicles per carload, manifest and unit practice TPC) present that on common they haven’t but returned to 2019 ranges. (STB footnote: In its interim replace, UP is directed to advise the Board about whether or not its aim is to return service to 2019 ranges after which enhance additional upon that baseline, as the opposite carriers have indicated, or whether or not it has a special long-term aim.)
For its labor power targets, UP acknowledged that it expects to have 11,300 T&E workers at six months (11,400 workers in a single 12 months); 9,000 engineering employees79 at six months (9,000 workers in a single 12 months); and three,850 mechanical workers at six months (4,200 workers in a single 12 months). Nevertheless, the STB stated it’s unable to match UP’s progress to the month-to-month employment information within the docket that tracks workers actively on the job. As proven in Desk 8, UP exceeded its six-month T&E goal by roughly 2,000 workers in September when in comparison with the variety of workers actively on the job—a discrepancy that means that UP included totally different teams of workers within the T&E goal it supplied with its revised service restoration plan and the variety of T&E workers actively on the job.
STB directed UP to clarify this discrepancy in its interim replace, and supply six-month and one-year labor power targets for workers actively on the job (utilizing the identical timeframe place to begin as its key service efficiency indicator targets) that the Board can monitor towards the month-to-month information UP is submitting within the docket. Upon additional evaluate, the Board noticed that in its revised service restoration plan, UP asserted that it deliberate so as to add 1,400 T&E workers in 2022 for a internet enhance of 400 new T&E workers when factoring in attrition. Nevertheless, to sure different information, between Might and September, UP added solely 70 energetic T&E workers.
STB’s Formal October 28, 2022 Findings
Along with the particular points addressed above within the discussions of every service’s latest information, the STB stated it “will order every of the 4 Carriers to incorporate an interim replace with the next data:
- “As a result of the Board is extending the non permanent reporting interval for one more six months, the 4 Carriers are directed to submit targets that they count on to satisfy on the finish of the prolonged non permanent reporting interval for every of their key efficiency indicators.
- “CSX and NS could, if crucial, replace their labor power targets submitted in response to the June 13 Order. BNSF and UP should replace their labor power targets. Every service can be directed to incorporate an evidence for any labor power goal modifications.
- “If any of the 4 Carriers have made different modifications to their service restoration plans as submitted to the Board, these carriers ought to present the Board with particulars about modifications they’ve made or intend to make to attain their longer-term success. If a service doesn’t intend to make any modifications, these carriers ought to so point out.
“Primarily based on the progress proven within the ensuing reporting from the 4 Carriers, the Board will decide whether or not any additional public hearings are warranted on this docket.
“It’s ordered:
- “BNSF, CSXT, NS, and UP shall submit the interim replace described above on December 2, 2022.
- “BNSF, CSXT, NSR, and UP shall proceed to submit biweekly service progress studies for a further six-month interval, till Might 5, 2023.
- “All Class I railroads shall proceed to submit weekly efficiency information and month-to-month employment information on this docket for a further six-month interval, till Might 5, 2023.”
Impartial railway economist and Railway Age Contributing Editor Jim Blaze has been within the railroad {industry} for near 50 years. Skilled in logistics, he served seven years with the Illinois DOT as a Chicago long-range freight planner and virtually two years with the USRA technical workers in Washington, D.C. Jim then spent 21 years with Conrail in cross-functional strategic roles from department line economics to mergers, IT, logistics, and company change. He adopted this with 20 years of worldwide consulting at rail engineering agency Zeta-Tech Related. Jim is a Magna Cum Laude Graduate of St Anselm’s Faculty with a grasp’s diploma from the College of Chicago. Married with six kids, he lives exterior of Philadelphia. “This column displays my continued ardour for the way forward for railroading as a aggressive {industry},” says Jim. “Solely by often difficult our establishments can we probe for higher high quality and efficiency. My opinions are my very own, unbiased of Railway Age. As at all times, opposite enterprise opinions are welcome.”
