A current article in TRAINS NBewswre
@ BNSF eliminates management jobs amid uncertain freight outlook - Trains
Surely, seems to indicate that the recen kerfluffle at NS has also possibly, similar ramifications at BNSF...
FTA:"... [in part] The railroad did not disclose how many jobs were affected, but people familiar with the matter say that BNSF cut 8% of its management workforce. That would translate into roughly 400 positions based on the January employment figures the railroad reported to the Surface Transportation Board.
“As a business tied to the industrial and consumer economies, we must always adapt our resources to meet demand. The freight market faced significant headwinds last year and our outlook for 2024 remains uncertain, as it does for many of our customers,” the railroad said in a statement. “To ensure our long-term success, it is necessary to make workforce decisions that respond to a complex and ever-changing freight environment. While these decisions are never easy, we must position ourselves to continue providing the industry-leading service our customers expect.”
The cutbacks come less than two weeks after Warren Buffett, chairman of BNSF parent Berkshire Hathaway, said the railroad’s 14% earnings decline in 2023 was deeper than expected. The railway’s operating ratio increased 2.5 points to 68.4% last year, which lagged the other five big systems.
“Though BNSF carries more freight and spends more on capital expenditures than any of the five other major North American railroads, its profit margins have slipped relative to all five since our purchase..."
Locally, it has been reported that the BNSF 'shops' in Topeka,(Ks) were to be a focal point oif those ;reductions'. (?)
Living on a BNSF line, off of the T-con; I have noticed a recent reduction in traffic,both East and West. (froim Wellingtn(Ks) to KC area) I had suspected it was the recent line constructiuon East of here, (Bridge and Dbl trackng) was the cause. After a weekend trip to Augusta, I saw very little change; seemed to be no further construction/or additional track wrk.
We were used to seeing regular/ multiple stack traffic in both directions; not to mention, grain shuttles, at all times. Also, what seemed to be a regular set(E-W) of TOFC traffic.. Now, not so much ?
Is the Wall Street Crowd tightening their grip? Even Warren Buffet seems to be forgetting his 'mantra' - where his investments were concerned? THOUGHTS?
Warren said a few years ago, don't remember exactly when since time seems to go by fast, that BNSF may have to look at doing some PSR things. They may have not gone to the extremes of other class ones, but they did start doing some things right out of the PSR playbook.
Berkshire Hathaway may be somewhat immune to Wall Street, but maybe not as much as it once was since adding the Class B shares.
Jeff
Per port web site public data and other industry publications:
The Port of Los Angeles handled 8.63 million TEUs in 2023 which was a decline of 12.9%.
The Port of Long Beach handled 8.02 million TEUs in 2023 which was a decline of 12.7%.
The Northwest Seaport Alliance (Seattle and Tacoma) handled 2.97 million TEUs in 2023 which was a decline of 13.7%.
That surely impacted BNSF volume. Other freight volumes were also down.
I don't think Mr. Buffett expects an OR in the high 50s but BNSF has had some years in the low 60s and that level seemed to generate net profit in a range which seemed to meet his expectations, based on his annual letters and management discussion and analysis in the Berkshire Hathaway annual report.
A quick comparison with UP.
In 2023, UP had $24.119 billion in revenue, had Net Income of $6.379 billion (26.4% of revenue), and an OR of 62.3.
In 2022, UP had $24.875 billion in revenue, had Net Income of $6.998 billion (28.1% of revenue), and an OR of 60.1.
In 2023, BNSF had $23.876 billion in revenue, had Net Income of $5.087 billion (21.3% of revenue), and an OR of 68.4.
In 2033, BNSF had $25.888 billion in revenue, had Net Income of $5.946 billion (23.0% of revenue), and an OR of 65.9.
jeffhergertBerkshire Hathaway may be somewhat immune to Wall Street, but maybe not as much as it once was since adding the Class B shares.
I bought a lot of his stock in 2008 and have never regretted that decision. His investment approach is rather bizarre in places though, in my view. He could do a lot better but holds back because his former mentor (Munger) I think taught him only to invest based on pure financial ratio analysis and some other mysterious metrics that seem to indicate a good buy. The former is pretty easy but the latter is a complete mystery to me and the rest of Wall Street.
Onto the companies he owns like BNSF and the companies he has a stock position in but does not own outright. He noses in on the management of each. I know in the case of Kraft-Hienz (KHC), he is the guy that pushed that merger together. In the case of CitiBank (C), he is the guy that pushed hard on the reorg which included massive layoffs. So his invisible hand is in a lot of places. But then people ask why does he hold Kraft-Hienz for so long and even now when it is only starting to turn around (he has the reputation in part as a bag holder in regards to some stocks). Why is investing in lost cause Sirus XM Radio (SIRI). Nobody really has a clue and he could do better in a lot of cases.
So having said all that, have not really heard much in regards to BNSF comments or possibly missed them in the press. My feeling is outside of the metrics he does not understand railroads like he does insurance companies, banks, and manufacturing concerns. BNSF I think was his first railroad holding and he bought it pretty cheap in 2008 when he started accumulating shares. I have no clue myself what his direction is with BNSF. Wall Street is now looking at railroads not so much as a long-term buy and hold as they used to look at them. Across the board and not just at BNSF (UP as well), revenues are not doing too well right now. Which probably has him concerned given the size of his investment in BNSF.
kgbw49I don't think Mr. Buffett expects an OR in the high 50s but BNSF has had some years in the low 60s and that level seemed to generate net profit in a range which seemed to meet his expectations, based on his annual letters and management discussion and analysis in the Berkshire Hathaway annual report.
Completely agree he is unhappy with BNSF and partly it is OR but there is something else he is using as well vs just OR..........no clue what it is. It is not OR by itself though in my view.
Buffet bought the BNSF when it was the best run railroad in the industry. Then sat back and did nothing as the people who made it into the powerhouse it was were run off due to not worshipping at the Church of PSR run by EHH. Then with all the good railroaders railroaded out of there they lost their edge.
Shadow the Cats owner Buffet bought the BNSF when it was the best run railroad in the industry. Then sat back and did nothing as the people who made it into the powerhouse it was were run off due to not worshipping at the Church of PSR run by EHH. Then with all the good railroaders railroaded out of there they lost their edge.
Thats a little far fetched in my view. He bought the railroad in 2008 or 2009, mainly because it was cheaply priced due to the financial crisis and that is how Warren Buffet operates. He had no clue if it was the best run railroad or not other than what he could figure out via OR and/or whatever measure he is using. Though before he bought it because he would be a major purchaser and due to how stock buys work when your above a ownership percentage, BNSF had Senior Management meetings with him and gave him more inside info that a regular stockholder does not have access to. Even then it is somewhat of a risk and some gut instinct is required to move forwards to close the purchase.
All that aside. It's been close to, if not over 15 years now. A lot of those people at purchase time left due to normal turnover and retirement. Executives tend to want to retire when they think the company is in the best shape reasonably possible so they don't get clawed back if there is a major issue. Railroads are a solid stock investment and implementation or no implementation of PSR doesn't have a lot of impact on their future. UP has been around since the Civil War era.
Also, just general trivia here. It was Warren Buffet that convinced Bill Gates to buy a large position in CN and hold it and for some reason Waste Management.
As an interesting follow-on to this topic is a currently running article on TRAINS Newswire
@ https://www.trains.com/trn/news-reviews/news-wire/class-i-railroad-news-nuggets-too-interesting-to-ignore/
"Class 1 nuggets too interesting to Ignore" by BIll Stephens
samfp1943 As an interesting follow-on to this topic is a currently running article on TRAINS Newswire @ https://www.trains.com/trn/news-reviews/news-wire/class-i-railroad-news-nuggets-too-interesting-to-ignore/ "Class 1 nuggets too interesting to Ignore" by BIll Stephens
The NFL games conclusion should and could have been handled a lot better by the Vena. Understood the UP is a 24 by 7 operation but if you have employees voting with their feet like that on weekends, it's an issue HR should address with incentives or floater days off. Badly handled by Vena.
CMStPnP samfp1943 As an interesting follow-on to this topic is a currently running article on TRAINS Newswire @ https://www.trains.com/trn/news-reviews/news-wire/class-i-railroad-news-nuggets-too-interesting-to-ignore/ "Class 1 nuggets too interesting to Ignore" by BIll Stephens The NFL games conclusion should and could have been handled a lot better by the Vena. Understood the UP is a 24 by 7 operation but if you have employees voting with their feet like that on weekends, it's an issue HR should address with incentives or floater days off. Badly handled by Vena.
Rail Management and Labor are one of businesses first 'Us vs. Them' competitions - a competition where each trivalizes the others position to the point of absurdity. It was that way during my 51+ years of rail employment, 20 years of Management and 31+ years in the Crafts.
Some managements understand the necessity to work together - some don't.
Never too old to have a happy childhood!
BaltACD CMStPnP samfp1943 As an interesting follow-on to this topic is a currently running article on TRAINS Newswire @ https://www.trains.com/trn/news-reviews/news-wire/class-i-railroad-news-nuggets-too-interesting-to-ignore/ "Class 1 nuggets too interesting to Ignore" by BIll Stephens The NFL games conclusion should and could have been handled a lot better by the Vena. Understood the UP is a 24 by 7 operation but if you have employees voting with their feet like that on weekends, it's an issue HR should address with incentives or floater days off. Badly handled by Vena. "Rail Management and Labor are one of businesses first 'Us vs. Them' competitions - a competition where each trivalizes the others position to the point of absurdity. It was that way during my 51+ years of rail employment, 20 years of Management and 31+ years in the Crafts." "Some managements understand the necessity to work together - some don't."
"Rail Management and Labor are one of businesses first 'Us vs. Them' competitions - a competition where each trivalizes the others position to the point of absurdity. It was that way during my 51+ years of rail employment, 20 years of Management and 31+ years in the Crafts."
"Some managements understand the necessity to work together - some don't."
Very Gooid points ! Seems these techniques only seem to come after schooling in that School of Hard Knocks....Only a very few seem to understand the points naturally....And they, unfortunately, are few and far between....
CMStPnPThe NFL games conclusion should and could have been handled a lot better by the Vena.
You do realize that this has only been going on for the last 100 years or so. Historically, layoffs peak on weekends, holidays, first day of deer season and lots of other repetitive times.
CMStPnPUnderstood the UP is a 24 by 7 operation but if you have employees voting with their feet like that on weekends, it's an issue HR should address with incentives or floater days off.
You must have missed the first part of the article, the UP did give them extra time off and they used it. But they were still laying off.
The bottom line is if you want trains to run you need crews, if the crews layoff it's going to cause the service to be interrupted. Back in the day we used to shut down the railroad for Chritmas and New Years, but that was a HUGE disruption to the network and caused more problems, as a result they don't do that anymore.
Dave H. Painted side goes up. My website : wnbranch.com
dehusmanYou must have missed the first part of the article, the UP did give them extra time off and they used it. But they were still laying off.
Pretty sure Vena made it clear it was using illness as an excuse.
I think the issue here is the railroad treatment of sick days. In non railroad world, sick days are not time off that you can collect each year. They have never been in my work experience. In my non-railroad work experience if you take a sick day and your not actually sick and you get caught.........it never ends well. Now floater days off and personal days are a different issue and nobody cares about those as long as notice is given in advance. I am not sure why this confusion and maybe someone could clarify if this is union agreement stuff or railroad stuff.
dehusmanYou do realize that this has only been going on for the last 100 years or so. Historically, layoffs peak on weekends, holidays, first day of deer season and lots of other repetitive times.
Really? You don't say. Seriously though just because people do this does not mean it is OK nor does it mean an employer should expect it as a given. With a paid position in any occupation, your expected to take vacation or personal days for the above. Not sure how the layoff process works in as far as reasons given or how the priority is determined via reasons given. Obviously, Vena is stating that reasons given.........matter to him as CEO. If I were trying to manage that mess, it would matter to me because it blurs the stats used to determine if there is a workforce environment issue.
BaltACDRail Management and Labor are one of businesses first 'Us vs. Them' competitions - a competition where each trivalizes the others position to the point of absurdity. It was that way during my 51+ years of rail employment, 20 years of Management and 31+ years in the Crafts. Some managements understand the necessity to work together - some don't.
Understand that. It used to be that way in the military between Officers and Enlisteds, though just really bizarre the military has liberalized / relaxed in that area some and railroads have not. Also a little sad that the military is ahead of railroad managements in that respect.
I would opine that it's a sign of the times. People want their weekends off, because everyone else has weekends off.
Perhaps this could be somewhat alleviated by having the railroads figure out a way to have more consistent scheduling. Most other industries that require 24/7 schedules have.
I realize there are variables in railroading that a 9-5 schedule can't accommodate, but not knowing whether you can make your kid's last soccer game or your sister's wedding because you might get called is apparently not sitting well with the worker bees.
OTOH, I recall an anecdote from some years ago wherein a boss was complaining that his people took 40% of their sick days on Mondays and Fridays... (Clearly a M-F operation)
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
tree68 CMStPnP Understood the UP is a 24 by 7 operation but if you have employees voting with their feet like that on weekends, it's an issue HR should address with incentives or floater days off. I would opine that it's a sign of the times. People want their weekends off, because everyone else has weekends off. Perhaps this could be somewhat alleviated by having the railroads figure out a way to have more consistent scheduling. Most other industries that require 24/7 schedules have. I realize there are variables in railroading that a 9-5 schedule can't accommodate, but not knowing whether you can make your kid's last soccer game or your sister's wedding because you might get called is apparently not sitting well with the worker bees. OTOH, I recall an anecdote from some years ago wherein a boss was complaining that his people took 40% of their sick days on Mondays and Fridays... (Clearly a M-F operation)
CMStPnP Understood the UP is a 24 by 7 operation but if you have employees voting with their feet like that on weekends, it's an issue HR should address with incentives or floater days off.
When the CSX Atlanta Division was my territory - among the T&E Unions on the various crew districts on the division - they implemented virtually EVERY form of crew calling you can think of. From all pool FIFO calling to all assigned with designated call times and Deadheading if the assigned train was outside of its window - and virtually every combination in between. There is no silver bullet that answers the need to move trains and for crews to have a 9-5 Sat-Sun off as their working enviornment.
With the Southern portion of CSX being a mostly single track railroad - the WORST operating condition that can afflict it is - CREW SHORTAGE. If you don't have crews readily available at a crew change location - to keep an open route through the crew change location, trains without crews available for them will start to be parked in passing sidings short of the crew change location - generally in BOTH DIRECTIONS and all of a sudden you end up with 100 mile and more meets with dead trains in all the sidings in between. To dig any train out of the mess will take two crews, one crew on the district where the train died and one crew on the district that will be moving the train onward. This happens in both directions from the crew change location.
tree68I would opine that it's a sign of the times. People want their weekends off, because everyone else has weekends off.
Not really a change from what used to be. The real change was when jobs and extra lists were gutted which resulted in the implementation of harsh & non-negotiated attendance policies. If anything, this is leaning the boat slightly toward the old normal.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.
CMStPnP Pretty sure Vena made it clear it was using illness as an excuse. I think the issue here is the railroad treatment of sick days. In non railroad world, sick days are not time off that you can collect each year. They have never been in my work experience. In my non-railroad work experience if you take a sick day and your not actually sick and you get caught.........it never ends well. Now floater days off and personal days are a different issue and nobody cares about those as long as notice is given in advance. I am not sure why this confusion and maybe someone could clarify if this is union agreement stuff or railroad stuff.
Back when the unions were ready to strike over "quality of life" issues, among other things, I thought the unions failed to answer the carriers' contention that TE&Y people had plenty of time available vis a vis vacation and personal paid leave days.
Yes, we have the personal paid days and vacation that can be taken as single days when we wish to. That is, only when the carrier gives approval to take one. We have a program of reserving those days in advance. However, the number of available slots are limited, with some dates blocked out. (Interestingly, some major holidays aren't blocked out.) Those advance notice days aren't supposed to be denied, but I have heard of some having them denied when trying to activate them. If you have a spur of the moment issue, you might receive a miracle and get a day approved. Usually, "manpower" issues will have them being denied.
The only way to get time off in that case is to lay off sick/sickness in family. Before the paid days, laying off in either of those status resulted in points against the attendance policy. The paid days don't count against the policy. The Federal Family Medical Leave, even though not compensated, also doesn't count against attendance policy.
The whole idea behind the draconian attendance policies some class ones have adopted is to make everyone work as much as possible so they can have the minimum number of employees working. Those extra mandated days, by law or contract, upset the plan. Employees can lay off without consequence, even if only for a limited time.
I'm one of the minority when it comes to the paid sick leave. I didn't want it. I would rather have had that if you could prove sickness/sickness in family with say a doctor's note, that it wouldn't count against attendance. I've had nonmedical emergencies that my wife couldn't handle on her own, so have had to lay off sick because that was the only recourse available. (Unlike most, I would mark back up when things were taken care of.) For times like that I would willingly take the attendance hit. But when I have a doctor's appointment, I don't like having to reschedule 2 or 3 times before I can keep the appointment.
Within a couple of months, we will be starting an 11 days on, 4 days off work/rest cycle. Although the national contract called for "voluntary" rest days, our company came up with this mandatory off day agreement. We lose some things and have some changes which I'm not sure I care for, they have nothing to do with work/rest cycles or quality of life issues. The agreement was just a vehicle to get some items that can also reduce the number of active employees. I do think overall that most employees, including me, will like it.
Pity the carriers don't allow the enlightened approach used by the pre-9/11 Waffle House -- you can take all the unpaid days off you want as long as you find your qualified replacement.
If you had an 'advance scheduled' appointment and some manpower concern came up, you'd already have someone who agreed to serve in that 'window of time' who presumably had worked his or her schedule to be legal to work your shift or hours.
Never gonna happen for obvious reasons, but it did work in restricted context.
ATDA contract I worked under didn't allow Personal Days to be taken from Dec. 15 to the end of the year.
Having had sufficient seniority, I could take the Holiday weeks as vacation.
OvermodPity the carriers don't allow the enlightened approach
I doubt if railroads ever heard of the Enlightenment, much less practiced it.
Saved a crew at an Away From Home Terminal to protect the Primere train on the division going into a Holiday Plan. When called the crew marked off Operation Red Block. (crew under the influence of drugs/alcohol - Red Block mark off cannot be used as a disciplinary action)
BaltACD (crew under the influence of drugs/alcohol - Red Block mark off cannot be used as a disciplinary action) I would offer the opinion that Red Block mark off will always be on the mind of any supervisor who is confronted with the opportunity to favor or disfavor a request.
(crew under the influence of drugs/alcohol - Red Block mark off cannot be used as a disciplinary action)
There are costs involved with simply having an employee on the roster, whether they actually work or not. This is why the railroads want to have minimal rosters.
If it was simply a matter of paying employees for work done, it wouldn't matter how many employees were on the roster.
diningcar BaltACD (crew under the influence of drugs/alcohol - Red Block mark off cannot be used as a disciplinary action) I would offer the opinion that Red Block mark off will always be on the mind of any supervisor who is confronted with the opportunity to favor or disfavor a request.
Red Block is not a supervisors tool ... and there are limits to its use ... additionally there is follow up by a third party medical organization whose speciality is substance abuse interviewing those who use the Red Block mark off.
charlie hebdo Overmod Pity the carriers don't allow the enlightened approach I doubt if railroads ever heard of the Enlightenment, much less practiced it.
Overmod Pity the carriers don't allow the enlightened approach
I've read accounts from guys retired that on some railroads, SP was one, that until sometime in the 1970s they could mark off for a month at a time. Even when I started in 1998 it wasn't like it is now. Multiple weekend and some pattern lay offs were watched, but the availability average otherwise was supposedly 85%. They made some changes tightening it up, but nothing like when they went whole-hog for PSR.
I'm sure the rising cost of employees beyond wages is why the most liberal of policies were tightened up. Still, our contracts for those not working assignments that have regular rest days have called for a "reasonable" amount of time off. (I believe that predates the paid personal leave days. Those days were given instead of holiday pay for working holidays in irregular service before I hired out.) I guess in the railroad's view, going by the newest policies, the definition of reasonable means two, maybe three days in any 90 day period. One bright spot is they did lessen the amount of time to work off points.
Our new rest days will probably cut down, for some, how often they lay off. We will be getting a guarantee for road pools, and I fear the amount of guarantee they pay out will want the railroad to pull out or otherwise change the rest cycle agreement. That's the big reason they pulled out of the 7 and 3 we once had years ago.
Rio Grande Valley, CFI,CFII
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