BNSF, CSX, Norfolk Southern (NS) and Union Pacific (UP) have answered the Surface Transportation Board’s (STB) call to submit service recovery plans—identifying the steps they will take to clear congestion and improve service plus the metrics they will use to evaluate progress over the next six months.
On May 5—a little more than a week after its April 26-27 “Urgent Issues in Freight Rail Service” hearing—the STB, voting unanimously, issued updated, more-comprehensive rules for reporting performance and employment metrics. The eight-part regulations, which mostly affect the “Big 4”—BNSF, CSX, NS and UP—included filing of service recovery plans by May 20, followed by frequent progress reports and biweekly conference calls with STB staff.
“The Board is requiring service recovery plans and progress reports from the four largest U.S. rail carriers and is directing those carriers to participate in biweekly conference calls to further explain efforts to correct service deficiencies,” STB summarized on May 5. “The Board is also requiring all Class I rail carriers to report more comprehensive and customer-centric performance metrics and employment data for a six-month period [starting June 3]. In response to concerns raised at the recent hearing and related communications, the Board is taking this action to inform its assessment of further actions that may be warranted to address the acute service issues facing the rail industry and to promote industry-wide transparency, accountability, and improvements in rail service.”
Following is a roundup of the “Big 4” plans (also downloadable).
BNSF: ‘Restoring Service to the Level Our Customers Need, Expect’
“BNSF’s recent service difficulties were caused by a number of factors, but principally due to a sharp increase in volumes in 2021 that was far in excess of what BNSF and our customers had forecasted,” the Class I railroad wrote in its May 20 filing to the STB. “While BNSF includes a buffer in the resource planning processes that we described for the Board last month [at the “Urgent Issues in Freight Rail Service” hearing], the accelerated demand experienced beginning in 2021 outpaced our ability to quickly flex up resources to handle the volume surge. The congestion that resulted from this volume was magnified by an increase in car inventory as our customers brought additional cars online to attempt to mitigate the effects of our reduced fluidity as well as a series of external events throughout Fall 2021 and Winter 2021-22.”
The BNSF Service Recovery Plan includes three key components:
- Hiring and Training Efforts: BNSF in fourth-quarter 2021 boosted hiring, particularly in network areas “where we have faced greater challenges to hire and retain operating employees.” This year, the Class I railroad has recalled all but 23 of its furloughed TY&E employees, and has so far hired 402 TY&E employees. It reported that 229 new-hire TY&E employees have completed training in 2022, and another 209 will complete training in the next 90 days. Additionally, BNSF has implemented a number of programs to support recruiting, such as increasing “the number of offers we make to candidates to compensate for a decreased acceptance rate and [for a] increased rate of attrition occurring during initial training,” and offering a variety of incentives to current employees and job candidates “to locate in our high-need areas.” Over the coming year, BNSF reported that it will “adjust our hiring and training targets as necessary to ensure our crew resources stay aligned with our customers’ needs.”
- Increasing Locomotive Availability: BNSF has increased its active locomotive fleet by 350 units since the start of winter. “We surged resources to our locomotive shops to get these units ready for active service quickly, and we will continue to use that flex capacity at our shops to minimize downtime for maintenance and repair to ensure our fleet remains at the right size for our volumes,” according to the Class I railroad.
- Temporary Reductions to Car Inventory: “By closely managing the number of unproductive cars across our network, we can improve fluidity and velocity, enabling us to make more loadings and deliver loads faster,” BNSF reported. “We are mindful that our efforts to take cars offline may have short-term capacity effects for our customers, and we are engaged closely with our customers to identify mutually beneficial opportunities to store unproductive cars and are providing incentives to customers who voluntarily take cars offline. It is our hope and our intent to realize the inventory reduction we need to recover our network without unilaterally imposing embargoes on shippers and facilities.”
To track plan effectiveness, BNSF reported that it would monitor train velocity, terminal dwell, average trains holding (“a daily same-time snapshot of trains held on our network, averaged each week”), on-time performance, and local service compliance (BNSF’s “formulation of the First Mile/Last Mile”). The chart below shows “baseline scores at the outset of our current service recovery plan, current performance and target performance,” according to the Class I railroad. An updated chart will be submitted biweekly to the STB over the next six months.
BNSF also responded to the STB’s request that “each carrier within its service recovery plan … report on any plans it has to lift current velocity restrictions, as well as any plans it has to increase the power on its through trains—and not to limit the use of that power—so that each such train has the capacity to travel at track speed. To the extent a carrier has no such plan to lift velocity restrictions or increase power, the Board expects the carrier to explain why.”
BNSF reported that it would not “systematically suspend” its fuel conservation program as part of its service recovery plan. The railroad explained that it “strives to achieve an appropriate balance of velocity and sustainability, and there has proven to be little velocity value to suspending our fuel conservation program. The speed at which a train traverses the line of road between two terminals is rarely a substantial factor limiting the transit time of a customer’s shipment. Further, BNSF evaluates the way it operates the network from a full system perspective; and running all trains a little faster along the road and bunching them up at terminals would do more harm to service performance than good and would also unnecessarily mitigate the positive environmental outcomes created by our fuel efficiency programs.”
BNSF concluded that it looks forward to restoring service “to the level that our customers need and expect.”
Download BNSF Service Recovery Plan:
CSX: Back On Track Once ‘Crew Situation Normalizes’
CSX provided STB with information on four service performance indicators that will be updated and submitted over the next six months. (It noted that for each indicator, it “reviewed historical data in conjunction with current expectations for crew markups over the reporting period to determine an appropriate target.”) They are:
- 1. Trip Plan Compliance (TPC; placement within 24 hours of the original estimated time of arrival): “System-wide TPC (manifest) for CSX pursuant to [STB] metric 7(i) is 69% for week 19 (the week ending May 13, 2022),” the Class I railroad reported. “At the end of the six-month reporting period, CSX expects that TPC (manifest) pursuant to metric 7(i) will be at or above 80%. TPC (intermodal) for CSX pursuant to [STB] metric 7(iii) is 98% for the week ending May 13, 2022. … At the end of the six-month reporting period, CSX expects that TPC (intermodal) pursuant to metric 7(iii) will remain above 95%.”
- 2. First-Mile/Last-Mile (FMLM; percentage of scheduled spots and pulls that were fulfilled): “System-wide FMLM based on [STB] metric 5 is 83% for the week ending May 13, 2022,” CSX reported. At the end of the six-month reporting period, the railroad expects that figure to be at or above 85%.
- 3. Velocity: System-wide velocity came in at 22 mph for the week ending May 13, 2022, according to CSX, which expects velocity to be at or above 23.5 mph at the end of the six-month reporting period.
- 4. Dwell: System-wide dwell is 24.4 hours for the week ending May 13, 2022, and at the end of the six-month reporting period, CSX expects it to be at or below 22 hours.
CSX also addressed labor and power. The labor shortage has compelled the railroad “to be more creative and determined in its approach to recruiting, staffing and engaging employees.” For example, CSX wrote that it has “reevaluated the requirements for the conductor role by eliminating unnecessary prerequisites, and has expanded its presence across several types of media as part of its recruitment initiatives. CSX is encouraging current employees to recruit qualified people by offering a referral bonus. To effectively compete with other industries, CSX worked with SMART-TD to provide a 40% increase in pay for trainees.” Additionally, its training center “now has expanded class sizes that accommodate 40 or more trainees per class,” and “CSX has reduced the burden of expense reimbursement by providing trainees with gift cards.”
To retain current employees, the railroad reported that it is “working to incentivize commitment through voluntary programs, such as opportunities to earn cash prizes and a truck giveaway for good attendance,” and that it has “worked with labor to implement voluntary temporary transfers to challenged locations, where T&E employees who fill these critical roles receive bonuses both for qualifying on the new territory and again at the end of the six-month transfer, as well as lodging or stipends to offset temporary housing expenses.” CSX noted that it is also “engaged with its T&E employees to support work-life balance and total well-being.”
CSX reported that 675 T&E employees have begun training in 2022 and 436 have completed it (as of May 18, 2022). The railroad “believes it will be back to pre-pandemic T&E levels in the third quarter of this year.”
“As the crew situation normalizes,” CSX told the STB that it “expects its service will be restored to pre-pandemic levels and [will] continue to show progress thereafter.”
With respect to velocity, CSX reported that it “has no system-wide velocity restrictions in place. Localized velocity restrictions may be used where necessary for operational or safety reasons, as train speed can be impacted by various factors including geography, track condition, and train mix, among others. It is CSX’s intention to move at track speed whenever appropriate.”
With respect to power on through trains, “CSX wrote it “has already placed additional assets, including locomotives, on the network in order to handle current traffic levels. CSX’s service recovery focus is primarily on conductor hiring and resolving crew shortage issues in certain locations on the network. Adding more power to through trains would not improve service performance for CSX.”
Download CSX Service Recovery Plan:
NS: ‘Right Number of T&E Employees at the Right Location at the Right Time’
NS reported to the STB that it is “highly motivated” to restore service and handle higher volumes: “Recovering our service is Norfolk Southern’s highest priority.” To inform that recovery, it identified four key service performance indicators—system velocity, terminal dwell, local operating plan adherence, and on-time delivery—that together with the railroad’s “progress toward increasing its qualified Train and Engine (T&E) headcount, [will] provide an accurate snapshot to the Board and to our customers of the overall health of the Norfolk Southern network and our progress toward service recovery.”
NS told the STB that it does not have a system-wide velocity restriction. “The speed of a particular train is determined by a myriad of factors, which include track speed limits, geography, train mix, track occupancy, and efficiency and energy management considerations, among others,” it explained. “Those factors similarly inform power usage on each train. Norfolk Southern does utilize energy efficiency management systems, which improve fuel efficiency and limit emissions caused by rail transportation. Where trains are not meeting expected schedules, Norfolk Southern has relaxed certain energy management tools, and Norfolk Southern will continue to do so where appropriate and where it would have a positive impact on network fluidity.”
For the week ending May 13, 2022, the Class I railroad’s system average train speed was 17.34 mph. Its goal: to achieve a system average train speed in the range of 21.5 to 23.1 mph, which would equate to average quarterly train speeds in 2019. “It is uncertain whether Norfolk Southern will achieve that goal within six months,” the railroad noted.
For the week ending May 13, 2022, NS’s average system terminal dwell was 28.1 hours. Its goal: to achieve an average system terminal dwell in the range of 18.1 to 22.4 hours, which would equate to the average quarterly system terminal dwell in 2019. “It is uncertain whether Norfolk Southern will achieve that goal within six months,” the railroad noted.
Local Operating Plan Adherence
NS reported that it uses local operating plan adherence “as a measure of its success in delivering cars to a customer’s local facility upon order from the local serving yard.” Failures, the Class I said, can be both railroad-caused and non-railroad caused.
For the week ending May 13, 2022, NS’s system average local operating plan adherence was 74%. Its goal: to achieve a system average in the range of 75.5% to 83.3%, which would equate to the system quarterly average in 2019. “It is uncertain whether Norfolk Southern will achieve that goal within six months,” the railroad reported.
NS’s weekly percentage of manifest service railcars placed within 24 hours of the Original ETA was 48% for the week ending May 13, 2022. Its goal is to achieve an average weekly on-time delivery in the range of 74.9% to 87%, which the railroad reported “would equate to the system quarterly average on time delivery in 2019. It is uncertain whether Norfolk Southern will achieve that goal within six months.”
“Essential to our service recovery is having the right number of T&E employees at the right location at the right time to meet the demand,” NS told the STB. To onboard as many new conductors as possible, as quickly as possible, the railroad has added “significant resources to our Talent Acquisition, Health Services, and Technical Training teams to handle the higher volumes of job applicants and conductor trainees. We have streamlined the hiring and onboarding process, reducing the number weeks from identifying candidates to the commencement of training.” New classes of conductors have started every week this year, and NS said it expects to continue that through the first half of the year.
As of May 16, 2022, the Class I had 930 conductor trainees on property and is slated to grow its qualified T&E headcount sequentially throughout the year.
The railroad’s current workforce initiatives include availability bonuses, retirement deferral incentives, and vacation buy backs.
“We have grown the ranks of our ‘go teams’ and reprioritized their deployment to the areas of our network experiencing the most critical need,” NS added. “We have also offered temporary transfer incentives to help address localized needs for months at a time, as well as permanent transfer incentives.”
Download NS Service Recovery Plan:
UP: ‘Efficient Rail System Vital to a Robust Supply Chain’
“Until recently, congestion continued to build as our cars per carload rate increased from 7.6 in January 2022 to 8.9 by the middle of April 2022,” UP reported to the STB. “This congestion resulted in resources becoming more constrained as demand remained strong across the network, including in our Central Corridor (i.e., Chicago to Green River, Wyo.) and into Northern California and the Pacific Northwest.” The railroad noted that its focus on increasing and redistributing crews, locomotives and railcars has “paid off.” Performance has improved since mid-April 2022: “Operating inventory has decreased by approximately 11,000 cars, cars per carload has decreased from 8.9 to 8.6, and there has been a 4% to 8% improvement in train velocity and car dwell,” UP wrote. “These changes have caused car velocity to increase from 177 miles per day to 189 miles per day. We anticipate that our focus on crews, locomotives and freight cars will result in continued, steady improvement over the next six months.”
UP reported that it has temporarily relocated about 150 train, engine, and yard employees to provide additional crew supply for a number of specific hubs. In addition, its train service hiring and training “has steadily increased since the fourth quarter of 2021. As of May 6, 2022, Union Pacific has started 667 employees in training and graduated 223 train service employees so far this year. Employees currently training are scheduled to graduate by early August. Union Pacific is well-positioned to achieve its goal of hiring, training and graduating 1,400 employees by year’s end.”
Since the beginning of 2022, UP has added 150 locomotives to its network. “Although current locomotive supply is sufficient for our restoration efforts, Union Pacific will prepare 300 additional locomotives for a return to service in anticipation of additional growth expected later this year and early next year,” the Class I railroad told the STB. It is also continuing locomotive modernization and overhaul programs to improve fleet reliability, which “will, in turn, reduce variability on the network and improve our service consistency.”
UP reported that it “continues to implement plans that work toward reducing 8% to 10% of our system-owned railcar fleet.” Additionally, the railroad and its customers “have mutually agreed to remove 1% to 3% of private railcars on the system.” These car reductions “will further improve car velocity and reduce cycle times for the remaining cars on the network,” UP noted.
UP is also working to improve velocity by continuously evaluating “ways to reduce variability across its network,” and by continuously looking “for ways to reduce switching demand within the manifest network, which in the past has been a catalyst for congestion.”
Key Performance Indicators
UP reported that it will use five key performance indicators to show whether fluidity is improving across its network: car velocity, operating inventory, cars per carload, First Mile-Last Mile, and Trip Plan Compliance (TPC).
“An efficient rail system free from excessive congestion and delay is vital to a robust supply chain and national economy,” UP summed up. “Union Pacific anticipates that our key performance indicator metrics will recover to levels achieved earlier in the year, which will enable us to move our customers’ freight more reliably and consistently.”
Download UP Service Recovery Plan:
In related developments, the Association of American Railroads (AAR) on May 18 weighed in on the STB’s May 5 decision to release updated, more-comprehensive rules for reporting performance and employment metrics. While the move “reflects an understandable desire for quick action,” it was “not issued in a vacuum,” AAR reported.