Regulators scold railroads over recovery plans, order improvements


Union Pacific draws strongest criticism from STB for insufficient filing; fines possible

The four largest U.S. Class I railroads have been ordered to submit revised service improvement plans to the Surface Transportation Board; Union Pacific’s initial effort drew the board’s strongest criticism. (Trains: David Lassen)

The Surface Transportation Board, making clear its unhappiness with service recovery plans filed by the four largest U.S. Class I railroads, will require those railroads to correct deficiencies in service recovery plans submitted to the board, and to provide additional information on how they plan to improve service and communication with customers.

At least two of the railroads face the prospect of financial penalties if they do not provide sufficiently improved plans. The new plans are due June 23.

The plans submitted by BNSF Railway, CSX Transportation, Norfolk Southern, and Union Pacific “were perfunctory and lacked the level of detail that was mandated by the Board’s order,” the board said in a Monday release announcing its new order. Those plans were in response to an order issued by the board in May [see “Federal regulators order railroads to provide more service data …,” Trains News Wire, May 6, 2022], with initial six-month plans filed later that month [see “Railroads outline six-month service recovery plans …,” News Wire, May 23, 2022].

In Monday’s release, STB Chairman Martin Oberman said the railroads’ plans “are woefully deficient and do not comport with the spirit or the letter of the Board’s order. The plans simply failed to instill confidence that the carriers have a serious approach to fixing a problem caused by their own lack of preparedness to respond to external shocks and fluctuations in demand, including especially short-sighted management of labor forces and other resources.  While the railroads must always comply with Board orders, it is particularly disturbing that the railroads failed to comply with the order requiring them to file adequate service recovery plans. … I had expected a better response from the carriers to the Board’s previous order, and now with more explicit instructions, which should not have been needed, there will be no excuse for continued lack of compliance.”

The board’s 19-page decision also notes two railroads were almost a week late in filing April 2022 employment data, and that “even with the additional time, one carrier’s filings had deficiencies so serieous that that the data was rendered functionally useless. … The carriers must treat the data reporting requirement with the seriousness and diligence called for by the prevailing challenges in the freight network.

The decision calls for railroads to outline specific actions to improve service, particularly calling for details on how they will “remedy their current labor shortage and avoid futurelabor shortages” (emphasis in the original). It calls for target numbers for workers on the job in six months and one year, detailed by type of worker: train and engine; maintenance of way and structures; maintenance of equipment and stores; customer service employees; and all other personnel.

They must also provide details of incentives to attract and keep employees, and on numbers regarding employee training; provide details on velocity restrictions and power usage; and to “explain, with precision” how their actions will improve the metrics they use to evaluate performance.

Also, the 36 months of data that was required in filings earlier this month must now be broken down to a weekly level to “give the Board and the public a clearer sense as to the Carriers’ pre-pandemic performance and week-to-week variability. This in turn will allow the Board and other to better evaluate the adequancy of the Carriers’ ongoing recovery.”

Monday’s decision also assesses the original service recovery plans for each of the four railroads, saying BNSF “provided the most comprehensive” plan while Union Pacific’s “was by far the worst of all Carriers and reflected an attitude of indifference” to both its service issues and the STB’s oversight.

“Although there is already adequate justification for the Board to impose monetary penalties on UP for its continued violations of the May 6 order [requiring the service recovery plans] … the Board will defer any decision concerning the imposition of penalties until UP has had an opportunity to correct its filing and comply with the initial order,” the decision states. Norfolk Southern could also face penalties, the board said, if it fails to provide “clear six-month targets” for improvement in its performance metrics.

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