Employment levels for the U.S operations of the Class I railroads in May were at their highest point in 2021 year to date, although overall headcount is still down year-over-year, according to data submitted to the Surface Transportation Board (STB).
The increase in U.S. Class I headcount comes as a number of Class I railroads tell federal regulators that they are actively recruiting and hiring for new train conductors (see below).
Headcount for the U.S. operations of the Class I railroads totaled 115,508 employees in May, which was a 0.02% increase from April and a 2.84% decrease from May 2020.
Although May’s headcount was relatively flat from April, overall totals have been trending lower in recent years and they fell noticeably last year at the onset of the COVID-19 pandemic. The pandemic contributed to lower headcount levels in 2020 because rail volumes fell dramatically in April and May at the start of the pandemic. Total employment levels were above 120,000 employees for the first five months of 2020, and headcount has remained below 120,000 since May 2020.
Meanwhile, employment levels for the train and engine (T&E) category rose 0.2% from April to May, to 47,044 employees. Year-over-year, T&E headcount rose 7.75%. The T&E category is traditionally known as the one that is most sensitive to market demand and network capacity needs.
Class I railroads are hiring
To meet anticipated demand for service amid higher rail volumes, a number of the Class I railroads are actively recruiting and hiring, particularly in areas where there might be more pressures on the network.
Details of their hiring plans were in response to a request from STB asking the railroads to describe how they expect to have sufficient network capacity amid persistent congestion within the supply chain and as rail volumes pick up. The agency also wanted to understand how the Class I railroads viewed their hiring practices in light of headcount levels trending lower for the past several years.
Norfolk Southern (NYSE: NSC) President and CEO Jim Squires told STB in a June 18 letter that Norfolk Southern (NS) is conducting targeted hiring in locations where demand is greatest, and it’s streamlining the process to place qualified employees in the field. It is also offering financial incentives to conductor trainees.
NS attributed the lower headcount levels in recent years to operational changes. Efforts to consolidate trains led to reductions in the number of train starts, which resulted in trimming the workforce, according to NS. But the railroad also insisted that rail service wasn’t hampered by the reduction in headcount.
“With fewer trains required to move an equivalent amount of freight, we can provide a high level of service to our customers and even absorb volume growth with a smaller workforce. In fact, our service levels were at or near record highs throughout much of 2019 and 2020 as our train consolidation program and other efficiency improvements were underway,” Squires said. “These and other changes to our operations mean comparing employee headcount numbers from several years ago to employee headcount numbers today is not an accurate way to assess service levels.”
CSX President and CEO Jim Foote told STB in a June 17 letter that it has been expanding hiring to meet anticipated network demand. It expects to add nearly 500 new conductors to its ranks before the end of 2021.
“Our hiring plan is reviewed on a weekly basis, and modified to adjust for our business needs as necessary. CSX will set our 2022 hiring plan in the fall as part of our annual planning process when we have better insight into next year’s volume projections,” Foote said.
The CEOs of Kansas City Southern (NYSE: KSU), CN (NYSE: CNI), Canadian Pacific (NYSE: CP) and BNSF (NYSE: BRK.B) echoed similar sentiments about adding new trainee classes in 2021 and using 2022 volume projections to guide hiring for next year.
“BNSF is actively hiring in many regions across our network,” CEO Katie Farmer said in a June 9 letter to the board. “These plans include a total of over 330 infrastructure employees in 2021 to support BNSF’s capital expansion program. In addition, we have increased manpower at our intermodal facilities in the range of 15-35% across our network, and we continue our efforts to onboard additional resources at some of our more labor-challenged locations.”
She continued, “Our 2022 hiring plan is highly dependent on volume levels in determining the timing of bringing on transportation, maintenance and other personnel to support growth.”