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November Rail Employment Hits New Low

Headcount totals among the U.S. operations of the Class I railroads reached their lowest levels for 2019 in November, according to data from the Surface Transportation Board.

Benzinga · 12/30/2019 16:46

Headcount totals among the U.S. operations of the Class I railroads reached their lowest levels for 2019 in November, according to data from the Surface Transportation Board.

The number of employees working at the U.S. Class I railroads totaled 133,225 in November, the lowest monthly total for 2019 and also the lowest total within at least the last five years. November's total is a 10.6% decline from November 2018 and a 1% drop from October 2019.

In November, two categories showed double-digit percentage declines year-over-year. Headcount levels among equipment maintenance and stores fell 15% in November to 23,370, while headcount levels among train and engine employees slipped 13.7% to 54,636. The category of train and engine (T&E) employees tends to be sensitive to market demands for rail service.

November's declines can be attributed to several factors. The railroads' deployment of precision scheduled railroading (PSR), an operational model that seeks to streamline rail operations, may have caused the railroads to reorganize their labor forces. The railroads also tend to lower employment levels as winter approaches.

The headcount drop might also be in response to the decline in rail volumes. Year-to-date U.S. rail traffic totaled 25.8 million carloads and intermodal units for the week ending Dec. 14, according to the Association of American Railroads. That total is a 4.8% drop compared with the same period in 2018.

"Headcount within the volume-sensitive transportation [and engine crew] segment fell 13.7% y/y, marking the seventh straight month of declines and the greatest reduction in over three years, as persistent volume weakness and PSR-related efficiencies continue to drive down T&E headcount needs," said rail analyst Bascome Majors in a Dec. 18 research note for investment firm Susquehanna Financial Group.

Meanwhile, the drop in headcount levels over the last several years is a trend that can also be observed with data from the Bureau of Labor Statistics.

U.S. rail employment levels have fallen in 2019 compared with previous years.
Source: SONAR Surf, EMPN.RAIL

Image Sourced from Pixabay