AAR and ASLRRA leadership discuss railroad safety, labor, and operations-related topics at RailTrends

Leadership at two Washington, D.C.-based railroad organizations examined some key industry trends and themes at last week’s RailTrends conference in New York, which was hosted by Progressive Railroading and independent railroad analyst Tony Hatch.

Ian Jefferies, President and CEO of the Association of American Railroads (AAR), took a look back at this time a year ago, during the late stages of what he called “contentious” rail labor negotiations between 13 U.S.-based railroad labor unions and the four U.S.-based Class I railroads.

“When we were sitting here [a year ago], we had ratified nine of 13 contracts and eight of 12 unions had ratified contracts, but we had some folks who had who had not ratified their contracts,” said Jefferies. “And in the coming weeks, following this conference, we were able to get things across the finish line, unfortunately, due to Congressional intervention.”

Since the completion of that contract nearly a year ago, Jefferies explained that almost all freight railroads have agreements to set up scheduled on-off cycles, for those employees working in a 24x7/365 day a year operation can set their dates in order to be available for a set number of work days, in order to maintain better work life balance, which he said is what employees expect. As an example, he cited sick leave, with 46 agreements in place between employees and railroads on the local side, which accounts for more than 90% of the covered population.

Looking at key issues, at the end of 2023 and into 2024, Jefferies pointed to railroad safety legislation, which he said is front and center, and views as an opportunity for a consensus-based piece of legislation that is targeted and addresses known issues, following the derailment of a Norfolk Southern train in East Palestine, Ohio last February.

“That's the basis of the legislative push,” he said. “I posed the question of if you have a policy provision, and I asked you what problem it is trying to solve, you should be able to answer that question. And, at the moment, there are a few provisions in that bill for which I don't think that question can be answered…legislating or doing policy on belief versus doing policy on data is not appropriate. And, so, we continue to be at the table and have those discussions and we'll continue to make our case to get things to a point where all stakeholders can be supportive [of the legislation].”

Chuck Baker, President of the American Short Line and Regional Railroad Association (ASLRRA), told the RailTrends audience that the last five or six years have been a very tumultuous time for the rail industry, from both an operational and publicity perspective.

For example, he noted that back then it marked the beginning of Precision Scheduled Railroading (PSR) in the U.S., which was followed by the pandemic, the subsequent supply chain crisis, and then a railroad-specific service crisis, the aforementioned labor negotiations, and the East Palestine derailment.

“From my perspective, this was the most attention—and essentially all negative attention—the rail industry has ever received in my career,” said Baker. “So, it has been a rough, I would probably say, about six years at this point.”

But on a more positive note, he added that he is starting to see more green shoots in the industry, citing how it is “turning the corner” on safety, service, and public perception, with the expectation that that next six years are going to be better than the last six years.

Addressing railroad safety, following East Palestine, Baker stressed that it is first and foremost in the industry.

“There are a dozen competing concerns at every moment, and there are other things you have to worry about when you're running a railroad, “he said. “But safety has to be first. It's always been that way. It needs to continue to be that way. I think the good news is that we are far, far safer than our competition and we are the safest way by far to move freight over land. We are also far safer than we used to be. If you look at the last 40 years of data, that trend is in a great direction, it's unquestionably true. But there's more to go. We are not perfect, and East Palestine is a great example. There are rail accidents every day. And we need to be better as an industry. We need to continue to focus on that.”

What’s more, Baker explained that while the railroad industry is able to defend its safety record and point out it is the safest way to move freight, by far, compared to the competition, the industry needs to be humble and recognize it is not perfect and there remains a long way to go.”

From a short line perspective, he observed that CEOs focus on safety and how they can service their customers every day, which has been the case for decades.

“We're focused on customers’ customized, flexible local, friendly service, it's how do I get one more carload from the existing customer or one more percent of their move, or how do we get one new customer?” he said. “And that focus across 600 short lines in 49 different states has served us well. And it is, to me, there's one of the industry's really fun, wonderful kind of win-win success stories.”