Home » Posts tagged 'railroads'

Tag Archives: railroads

Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Railroads Slashed Jobs Again in Nov, to Lowest in Many Decades, Traffic Down 17% since 2006, Stocks Soared to Record High

Railroads Slashed Jobs Again in Nov, to Lowest in Many Decades, Traffic Down 17% since 2006, Stocks Soared to Record High

Railroads responded to structural challenges by slashing jobs. Did nothing for volume but did everything for their stocks.

The North American Class 1 freight railroads – BNSF, Union Pacific, Norfolk Southern, CSX, Canadian National, Kansas City Southern, and Canadian Pacific – have been shedding employees since 2015, and in November they shed another 1.6% of their employees, from October, bringing the total down to 114,960 employees, according to data released by the Surface Transportation Board (STB), an independent federal agency. It was the lowest headcount in many, many decades.

November headcount was down by 13.7% from a year ago, down by 22% from the Great Recession low at the end of 2009 (147,000), and down by 33.5% from the recent high in April 2015 (174,000):

Railroads submit employment data – along with a slew of other operating data – to the STB on a monthly basis. I have excluded Amtrak (the National Railroad Passenger Corporation) because it is not a freight railroad (it too cut headcount).

Back in 1997, which is as far back as the publicly released data by the STB goes, railroads employed 178,000 people. In 1998, railroads employed 180,000. Employment in November was down by 36% from 1998. The chart below shows Class 1 railroad employment in each year in December, except for 2020, when I used November (in recent years, headcounts dropped further from November to December):

Compared to November last year, each of the Class 1 railroads shed employees, in order of the number of remaining employees:

  1. BNSF: -15.6% (35,081)
  2. Union Pacific: -13.4% (32,046)
  3. Norfolk Southern: -15.9% (19,199)
  4. CSX: -9.0% (17,093)
  5. Canadian National: -13.2% (6,183)
  6. Kansas City Southern: -10.1% (2,718)
  7. Canadian Pacific: -9.4% (2,640)

Since September 2016, which is as far as the STB’s monthly data by individual railroad goes back, some railroads have been busier than others shedding employees. All combined have shed 24.6% of their people. Each railroad, in order of the biggest shedders in percentage terms:

…click on the above link to read the rest of the article…

Deep “Freight Recession” Hits Railroads, Trucking, Air Freight

Deep “Freight Recession” Hits Railroads, Trucking, Air Freight

“Consumers just don’t seem to be showing up….”

As much as we would have liked to, the Dow Transportation Average wasn’t kidding. It has plunged 27% since its high on December 5, 2014. Nearly two-thirds of that plunge came over the past two months. Transportation companies are singing the blues. Railroads, trucking, air freight….

Union Pacific, the largest US railroad, reported awful fourth-quarter earnings Thursday evening. Operating revenues plummeted 15% year over year, and net income dropped 22%.

It was broad-based: The only category where revenues rose was automotive (+1%). Otherwise, revenues fell: Chemicals (-7%), Agricultural Products (-12%), Intermodal containers (-14%), Industrial Products (-23%), and Coal (-31%). Shipment of crude plunged 42%.

So Union Pacific did what American companies do best: it laid off 3,900 people last year.

This is what CEO Lance Fritz told Reuters about the American consumer: “What’s causing us some concern is it’s hard to figure out where the consumer is at.”

Consumers were sending mixed signals. Spending is shifting from retail of goods toward services. People were buying automobiles, and auto shipments rose in the quarter. And unemployment numbers looked good, he said, but labor participation “is lackluster and consumers just don’t seem to be showing up to purchase goods and services.”

And another disappointment about consumer behavior, according to Fritz: “There was a widespread belief that consumers would turn the savings from low fuel into spending, and we haven’t seen that so much.”

Canadian Pacific, which is trying to buy US rival Norfolk Southern in a deal that is vigorously contested by other railroads, reported a 4% drop in fourth-quarter revenues and a 29% drop in net income. Among its biggest decliners: crude-oil shipments (-17%) and consumer-products shipments (-24%). It garnished the report with an announcement of up to 1,000 layoffs.

CSX, in its earnings release earlier in January, reported a revenue decline of 7% for the year.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase