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AFL-CIO Transportation Head Says Labor/Shipper Coalition Supports Tougher Regulation of Railroads

The head of the AFL-CIO Transportation Trades Department (TTD) says a coalition of labor unions and shippers in agriculture, energy and chemicals supports giving the Surface Transportation Board stronger powers to regulate the nation’s railroads

In an interview with AJOT, Greg Regan, president of the Transportation Trades Department, AFL-CIO, representing U.S. transportation workers said: “If you would have asked me five years ago if my organization would be signing a joint statement of principles with shipping organizations, big agriculture, big energy and big chemical organizations I would have told you that you are out of your mind but that is what we have done here.”

 Greg Regan, president of the Transportation Trades Department, AFL-CIO

Rail Strike Unlikely

On the issue of a possible rail strike, Regan is optimistic that differences between unions and the railroads will be resolved: “I expect within the next couple of days, the President will issue an executive order establishing a Presidential Emergency Board (PEB) which will prevent any work action from the railroads or the union.”

He said: “The Board would have 30 days to look at the contract dispute between the two sides and issue recommendations for what it sees as a fair contract for the two sides. From there, the parties can negotiate around the PEB recommendations that will encourage an agreement. That is what the unions want: they want a contract that their members will ratify. So, I don’t think a strike is imminent.”

Growing Labor Shipper Demand For Tougher Railroad Regulation

Regan said the supply chain crisis following the pandemic has resulted in massive dislocations in service by the nation’s railroads who have cut back on employees and in operations forcing service reductions as well as higher prices for shippers obligated to transport their goods by truck rather than lower cost rail: “We are at a stage in our story where you cannot bifurcate some of the labor struggles that we are experiencing with the broader economic struggles that the shippers are seeing. I think there is an increased awareness of that from big business in this country. I think that there is some growing recognition that our struggle is their struggle in many ways. We are working together toward a shared goal of a robust, efficient and effective freight rail network that can meet the needs of our country while paying people what they’re worth.”

Regan cited the “Statement Of Principles And Proposal Regarding Freight Rail Service Issues And The Common Carrier Obligation” signed by labor unions and major shippers stating: “Service provided by the major U.S. Class I freight railroads has severely deteriorated in recent years; this deterioration is a result of the railroads’ adoption of new and drastic cost-cutting business models that reduce the public interest to a secondary consideration, at best; and that many shippers today can no longer access the levels of service that they require, and historically received. This deterioration has harmed both small and large businesses across the country, has been detrimental to the interests of railroad rank and file employees, has contributed to significant supply chain challenges, and has increased costs for American consumers. 

As noted in recent public hearings before the U.S. Congress and the Surface Transportation Board (STB), there have been failures of the Class I’s to comply with their critical statutory obligations to provide service to meet their customers’ transportation requirements upon reasonable service terms, known as the railroads’ “common carrier obligations.” 

The signers say they support stronger regulation of the nation’s railroads: “However, the lack of statutory specificity as to the definition and demands of ‘reasonable service’ and cumbersome enforcement mechanisms have hindered the ability of shippers to obtain reasonable service terms and redress from inadequate service.”

The groups agree on the following principles:

“1) By existing statute, (a) rail customers (shippers) have a right to receive reasonable service terms on reasonable request to enable the efficient and reliable receipt, transportation, and delivery of property, and (b) railroads are obligated to provide service in compliance with such standards.

2) If the railroads do not meet these obligations, there needs to be an expeditious and effective enforcement process to obtain such reasonable terms and service through the authority of the STB, which is statutorily charged to provide economic oversight of the railroad industry and resolve rail service issues. 

3) Congress must ensure that rail customers receive the quality and frequency of service that they require and are entitled to by law, and that railroads will provide such service by better defining and detailing the common carrier obligation, and by establishing an expedited mechanism for the STB to ensure compliance and resolve disputes in instances where those obligations are not being met.”

The statement is signed by a number of labor unions and shippers including:

  • American Train Dispatchers Association
  • Brotherhood of Locomotive Engineers and Trainmen
  • Brotherhood of Maintenance of Way Employees Division
  • American Chemistry Council
  • Corn Refiners Association
  • Freight Rail Customer Alliance
  • National Grain and Feed Association
  • National Industrial Transportation League
  • Private Railcar Food and Beverage Association
  • Western Coal Traffic League

Problems With PSR

Regan says a major problem is the adoption of the Class 1 railroads of the system known as Precision Scheduled Railroading (PSR): “This is a problem that has been building for some time. The core of this is Precision Scheduled Railroading (PSR). This is a philosophy that I know the railroads will say is about efficiency. Our experience is it’s about reducing headcount and overhead to pursue as much profits as possible. The railroads have already been operating at such a skeletal level. They have crew sizes that are well below what they need to operate for efficient rail service. Since 2015, the railroads have reduced their work force by 45,000 people. During the same time, the railroads made $146 billion in pure profit. During that time, they have also mothballed rail cars and locomotives, they have shuttered railyards and deferred maintenance. This is in pursuit of that quarterly return so as to benefit their shareholders.”

Port of LA’s Seroka Worries About Continuing Rail Delays

Delays by the Union Pacific and the Burlington Northern Santa Fe Railroads has led to rising delays or “dwell times” moving containers off of Port of Los Angeles docks of 7.5 days as opposed to the average of 2 days, according to Gene Seroka, executive director, Port of Los Angeles.

At his July 13th, media briefing Seroka noted that there were currently 29,000 containers awaiting to be moved off of Port of Los Angeles docks by the two railroads when 9,000 containers are the normal backlog. 

Seroka urged the railroads to do more about the backlog. 

Leadership From General Lyons 

At the briefing, Seroka was joined by retired General Stephen Lyons, the recently appointed Port and Supply Chain Envoy to the Biden-Harris Administration Supply Chain Disruptions Task Force. Lyons who echoed Seroka’s concerns about moving freight off the docks faster.

Reagan praised the appointment of Lyons who he believes supports a strong and more robust national freight system:

“One thing I’m really happy about with General Lyons is because of his background with USTRANSCOM (U.S. Transportation Command: a unified combatant command supporting the military services, defense agencies and other government organizations.) He’s not looking at profits, he’s looking at moving things efficiently and I think he’s taking the mindset he had in the military about moving our troops in the most efficient manner and adapting that to the private sector. He doesn’t come from any specific industry. He doesn’t have any ingrained biases because he was a trucking person or a railroad person, he’s coming in with the eyes of someone who knows how to move things …  I think he recognizes that everything, be it railroads, trucking, warehousing, the ports, and the intermodal facilities need to be working well and need to be working together.”

Legislation Faces Uncertain Future In The Senate

The labor/shipper legislation for tougher regulation of the railroads is before the House of Representatives and may be decided upon next week. 

Regan admits that if the proposed legislation passes the House, it still faces an uncertain outcome in the U.S. Senate.

As a result, Regan wrote a letter to U.S. Senators urging them to support tougher regulation of the railroads:

“Therefore, we urge you to help remedy this crisis by supporting legislation reauthorizing the Surface Transportation Board that would 1) clearly define this element of the “common carrier” obligation and 2) provide the STB with more effective mechanisms to enforce this obligation.” 

Stas Margaronis
Stas Margaronis

WEST COAST CORRESPONDENT

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