Toughest Challenge for Railroads in Coming Years ?

[Paul_D_North_Jr]

Introduction: The other day I was re-reading a 2005 Fred Frailey 'feel-good' article in Trains on Norfolk Southern's 'comeback' after its somewhat botched 1999 acquisition of 58 % of ConRail and merger into its system, etc.  As Frailey wrote it, despite a bunch of smart guys there - ''as good as any in the business'', is how I believe then-NS Chairman David Goode spoke of them - they still got blindsided by a whole bunch of factors.  Now not all of those were merger-related or merger-caused - such as the decline in Pocohontas coal competitiveness and shipments for a couple of years then.  As NS' Jim McClellan reportedly said - "If this continues for another 6 months, we may as well go to Fort Worth and ask Matt Rose and BNSF to take this railroad off our hands".  But then NS made some changes, buckled down, and pulled through.  So that got me to thinking - what else might have happened back then instead, which might not have turned out so well ?  And then by extension -

Question:  What might happen - either now, soon, or in the near future, say within the next 3 to 5 years - that would challenge the profitability, propserity, and maybe even survival of the railroad business and railroad operations as we now know them ?

No holds barred here - all subjects are 'fair game' as far as I'm concerned, everything from fuel to society to technology to equipment to regulation to politics to finances to labor relations, etc., etc.  What do you see as being the biggest upcoming challenge(s) for your favorite or local railroad ?

Let the fur fly and the fun begin !   And thanks in advance for your participation. 

[Railway Man]

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

[blownout cylinder]

Just how thin is that pipeline? In some cases pretty darn thin now--

 I'm thinking that a lack of apprenticeships is one and the emphasis placed on theory in most colleges--as opposed to more "hands on" application of theory--may be some of the causes of that. Especially as cash strapped schools started to get out of the 'hands on' side to the detriment of many students and concentrate on the 'cheaper' theoretical side of education.

Another could be simple demographics as well---baby boom generation had more impact in a lot of ways--including numerical---the boom shadow and after are going to have some awfully big shoes to fill.

 

[gabe]

Railway Man

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

Chalk this up to another unfortunate peice of information that, had I known fifteen years ago, I would probably have a much more satisfying life . . . .

Gabe

[mudchicken]

gabe

Railway Man

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

Chalk this up to another unfortunate peice of information that, had I known fifteen years ago, I would probably have a much more satisfying life . . . .

Gabe

You might still be where you are Gabe....the "powers that be" were clueless as to institutional memory, future capital and intellectual property trained at great expense being allowed to retire and/or walk out the door. There is a whole bunch of management consultants and industrial engineers that thought fresh blood could be dragged-in off the street and plugged-in, no problem. Railroad upper management at the time blew it. (It's not only the Wall Street trash that were wrong about trying to balance the books simply by manipulating employment levels - lotsa upper level managers didn't think things out very far down the road - they're paying for it now.)

[henry6]

The question is so broad and deep with so many holes to fill in and fall into. 

Challange: global warming.  What is it going to do to energy markets and resources.  How will it it effect the use of energy in railroading?

Challange: global economy.  Where is the manufacturing going to be? where is the consumer going to be?  How big a ditch can you gouge in the American Contenents to create a short cut between China and Europe or can you really do that to the earth?  What can the US and its industries do to keep the ditch from happening by providing a means of moving boatloads of stuff from shore to shore? 

Challange: infrastructure.  How much, where, for and by whom?

Challange: passengers.  Let's not talk  Amtrak but about the passenger: who is he, what does he want and what does he need. Then who is gonna do what?.  And remember the passenger is all of us

Challange: Labor.  I don't think it is going to be as much a problem as some think.  In fact I think rail will be popular enough that there will be an intrest in many to get on board.  And with new technologies emerging, the need for old time knuckle bangers will be nil.  Whole new worlds will be opening up.

Challange: trains and railroads. Time to stop thinking 19th Century Choo Choo's and Robber Barons and start thinking 21st Century technology and who will be the involved parties.  Time for new concepts, new politics, new partnerships.

A mere nutshell.

[choochoobuff]

As in any business, there will certainly be challenges. However, I feel there will be some upside too. Railroads are ahead of the curve on the "green" aspect.  Carriers are using fuel efficiency and and lesser emissions to bolster their advertising.  We are also seeing a spike in ridership, and a greater interest in regional passenger links to the major lines of Amtrak.  Container business is constant and as much as some would like to see it dissappear, coal is going to stay in the picture.  Auto shipments will certainly rebound as well as lumber as the recession passes. In my humble opinion, there are threats to the carriers, but there are also avenues for growth.

[Murphy Siding]

Railway Man

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

  You have just described my industry to a T.  Who would want to work for a lumberyard?

[CNW 6000]

Murphy Siding

Railway Man

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

  You have just described my industry to a T.  Who would want to work for a lumberyard?

I'd take either industry...as long as I could still get health insurance/benefits for my family and it paid better than where I'm at now.

[BaltACD]

The double barrel challenge of the brain drain of retirement coupled with upsurge of traffic when the recovery hits full stride and turns back into an economy hitting on all cylinders in all segments of the economy.

The knowledge base of the mistakes of the past when presented with these challenges is retiring and walking out the door.  The mistakes of the past will be repeated by those who don't know about them.

[CShaveRR]

There are a lot of challenges coming to the industry. And the worst part of it is that the future can't be predicted with any certainty, even as much as it could have been a couple of years ago.

A couple of years ago, everything looked rosy, and predictions were great for demands for freight traffic to nearly double a few decades out. So railroads began building more (or improved) infrastructure, and people were worried that it wouldn't be expanded quickly enough. Now, we have a recession, and railroads are slowing down their infrastructure efforts to conserve resources (or waiting for some stimulus, or whatever). Will the railroads come out of the recession? Probably. Will the business be there? Harder to predict. Coal, the railroad's biggest commodity, probably won't be quite as much in demand if things go the way the Government is planning. The auto industry, another big player, has been decimated. So, how much do you build out?

Right now, you have locomotive and car manufacturers with plenty of excess plant capacity and laid-off workers. There will be a time, however, with tighter emission controls coming, when these same manufacturers won't be able to keep up with the demand. And when they finally do catch up, the cycle will begin again. I'm pretty sure that freight-car production hasn't been keeping up with retirements. Forty years ago (the mandatory retirement age for most cars) not much new was being built. But 30 or 35 years ago were boom times. We're going to need to replace a lot of box and covered hopper cars out there (maybe not so many box cars), and within a few years all of the previous generation of mechanical refrigerator cars will be gone. They've already said that tank cars are going to have to be replaced with "safer" ones. The day of reckoning will come for all of these aluminum coal cars beginning in 15-25 years. But how bad will that be if coal is no longer in great demand?

Employees? I don't consider myself to be as skilled as my predecessors. But I think my skills are different, and I can more than hold my own on the job. We've had discussions about how well-prepared new employees are with the changes in training procedures. Things are just different. The jobs aren't as back-breaking, but there are fewer employees to do them. They've dumbed down the rules to keep employees safe, but seem to be a whole lot quicker to discipline those who run afoul of them. It's not just one bar that's been lowered, it's the whole freakin' gym set! And work rules...one-man crews are probably inevitable, in spite of the lack of safety gained with the extra eyes and brains of the added people, and in spite of the current state of negotiations. So will the demand for dumbed-down employees with an even bigger workload be able to be satisfied by future hiring? Will they offer enough pay to anyone to make it worthwhile?

I'm sorry I haven't been as concise and coordinated as other responders to this thread, but there is just so much to think about here...I'm glad I don't have much responsibility in planning the railroads' future, because then I'd really have to worry about my job security and personal well-being.

[samfp1943]

blownout cylinder

Just how thin is that pipeline? In some cases pretty darn thin now--

 I'm thinking that a lack of apprenticeships is one and the emphasis placed on theory in most colleges--as opposed to more "hands on" application of theory--may be some of the causes of that. Especially as cash strapped schools started to get out of the 'hands on' side to the detriment of many students and concentrate on the 'cheaper' theoretical side of education.

Another could be simple demographics as well---baby boom generation had more impact in a lot of ways--including numerical---the boom shadow and after are going to have some awfully big shoes to fill.

 

RWM:

      With his usual clarity has identified possibly the single most problematic issue in the railroading business, moat likely, every business that relies on skillsets learned with much practice over years of sweat, and not a little blood.

Barry, as well has homed in on the process of putting skilled employees into the system.   You can teach individuals to do almost anything in a book and classroom, as well as what to expect in the area of daily job function.

     Ed B. and Nick, as well as some others posting here have pointed out.  It is the day to day drudge of practice, and accomplishing the actual nuts and bolts functioning of the work that makes the job flow in a timely and safe manner. Nothing drives home the lessons learned like tring to correct a misssed process of classification or trying to spot and pull in a place where traffic and position is against you.

  Each of the pro's here point out that it is the experiences of working with guys who KNOW you screwed up and will leave you stewing in your own juices- to drive that lesson home. THey knew and after the fact the newbie now also knows, and won't make that mistake again.

 Railroad jobs are CRAFT jobs preformed by Craftsdmen who have learned their true craft, while forged in the schools of hard knocks, techniques and understanding. It is apprentiship with a skilled mentor that brings a craftsman to a respectable skill level. Too many corporations practice the " Pat 'em on the a**, Kiss 'em on the mouth, and Throw 'em to the wolves," the OJT method of training a new hire.  It neither fosters confidence, skills or a desire to hang around to see an outcome.

   Railroading is a dangersous, difficult, and taxing on an employees ability to work safe by not taking what might be an obvious short cut.  The whole process is exacerbated by what seems to be a concentrated mindset that the employee must prove their loyalty by standing up to what could be considered to almost be a level of "hazing". There are probably some steps that could be taken by a company to make an employee's life ( not to mention family life, as well) a little more palletable and soften the "them against us", mentality that seems to exist in the business and railroad worlds.  

[edblysard]

RWM and Mudchicken hit it spot on...the institution knowledge, both in management and in the T&E departments is depleted, and replacements are not lined up to replace them.

As Sam pointed out, hands training in both is quite slim.

Management no longer comes up through the ranks, so they are clueless to how the actual T&E job works, and with the 30/60 retirement program, "old heads " are bailing out as soon as they can.

The second issue I see would be the fact that locomotive builders have pretty much reached the end of the envelope...bigger in not necessarily better.

They are having to re think and re engineer the idea of motive power, and with the intervention of the government and tier 3 emission requirements, they are in between a rock and a hard place satisfying both the carriers needs and the governments law.

Lots of new ideas out there, lots of prototypes, but....

[schlimm]

Challenges:

1.  Finding new workers on all levels who can not only get up to speed, but adapt to the many changes. 

2.  Retention - promotions from within.

3.  Adaptation to changes in traffic bases and new technologies.

4.  Possible rethinking of the entire transportation business, including ownership of the routes.

[bobwilcox]

There will always be the challenge of attracting, leading and retaining good people.  Give me a buff with a head for business any day of the week.  I foresee two more specific challenges. There is a big, developing demand for organizations that know how to run passengers trains financed by local governments. If were not careful the French will be running a lot more than VRE. Perhaps the BNSF learned enough from their South American experiences to generate some cash.  We are in the middle of a once every 80 year rummage sale in our economy.  The railroads with a future will be able to discern which of their customers will grow and which will die. Just think about the PRR and Espee in 1929 and 2009 in contrast to the then second tier N&W, SOU and Hill Lines. Ouch!

[passengerfan]

The newest Challenge to face the RRs will be the substantial weight increases proposed for trucks on the Interstate system. It is even being looked at for the first time favorably in California. The main reason is the new standards being introduced for truck diesels and the economy being the way it is the trucking companies are looking for trade offs with trucks grossing 120,000 thats a fifty percent increase over whats allowed now, That will certainly keep a lot of workers repairing and resurfacing the Interstates. The trucking companies are complaining that with the economy the way it is they either need a much longer period to implement the new emissions standards or the fifty percent increase in gross weights so they can use fewer trucks to meet the standards. This could cost the RRs a substantial amount of pig traffic and domestic container traffic if it comes to be. Especially with the RRs building all of the new loading facilities for pigs and containers. 

Al - in - Stockton 

[gabe]

What is the challenge working for a lumber yard?  Do you get board?

Gabe

[oltmannd]

Railway Man

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

That is a huge issue around here, and I see some good things happening and some not so good. There are really two issues. One is how many are in the pipeline and the other is what is in the pipeline. The good news is that they have been hiring like mad to take advantage of what little time remains for the "50 somethings" so that some of the institutional knowledge can be transferred. Also good is that they have resisted the temptation to lay off any of the new hires in this down year. The new hires get at pretty good orientation (they call it a training program - it lasts 18 months - but it is really just an orientation). HR's recruiting team has been hiring some really bright people, but they have not kept an eye open for those with an "unhealthy" interest in railroading. This is unfortunate, in my view, the ones that do have an interest tend to stumble up the learning curve at a faster rate. The other problem is what they do with the trainees after the orientation ends. Rather than just try to attach them to some field supervisors who would make good mentors and could use a hand, they have have been plopping quite a few into temporary office staff jobs. Not the best OJT... The mass exodus of the 50-somethings begins in earnest this year - the future will be interesting....

[oltmannd]

oltmannd

Railway Man

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

Part two of this is that there has been a decreasing reliance on institutional knowledge and an increase reliance on data, planning and operational tools and performance measures to get the job done. For example, a new train dispatcher using a dispatching system with an intelligent meet planner might be able to do a passable job without having a old head's experience and knowledge. Similarly, tools that help do operational planning on a strategic and tactical level lessen the need to understand and know traffic flows and train schedules at a detailed level. Once upon a time, the RR president could keep the operating plan in his head. RRs are too big and complex to be managed that way these days, and the shift toward managing using a more technical approach with data and tools will only help the transition to a new generation of railroaders.

[edbenton]

Sorry but if 120K became the Standard here is what 90% of the drivers that could safely haul it would do nationwide to their license and eat it.  Why we have enough of a hard time with 80K dealing with IDIOTS in cars that cut us off now.  Let alone with another 20 tons in the wagon.  Also the roadways are NOT DESIGNED FOR IT THEY ARE DESIGNED FOR 80K the Minneaplois 35W bridge ring a bell on Infastructure.  The Highway Trust fund is BROKE and with trucks weighs at 120K that scene would be common place.  The last major infastructure building was in the 50-60's for the Interstates Nothing NEW SINCE THEN.  Some of the Major Bridges in the Bay Area are so Bad they can not risk any OVERSIZE LOADS the Bay Bridge is one.  The Tappenzee a major Artery in NYC is overdue to be replaced and getting so worn out that pieces of Steel are falling OFF IT. 

See the IDIOTS IN CONGRESS INSTEAD DOING THE HIGHWAYS THE RIGHT WAY AKA THE CONTRACTOR IS REQUIRED TO WARRENTY THE WORK.  Nope cheapest bid gets the work so who cares that the roadways crumble the country has an unlimted Checkbook right.

[Railway Man]

 My group is going to lose 75% of its 50-somethings within the next 24 months.  The oldest, wisest person in the next cohort is 34.

RWM

[blownout cylinder]

oltmannd

HR's recruiting team has been hiring some really bright people, but they have not kept an eye open for those with an "unhealthy" interest in railroading. This is unfortunate, in my view, the ones that do have an interest tend to stumble up the learning curve at a faster rate. The other problem is what they do with the trainees after the orientation ends. Rather than just try to attach them to some field supervisors who would make good mentors and could use a hand, they have have been plopping quite a few into temporary office staff jobs. Not the best OJT... The mass exodus of the 50-somethings begins in earnest this year - the future will be interesting....

What you are referring to is a management style that is only recently coming to the fore--"coaching/mentoring". This was one of the pet peeves that my occupation--that being healthcare--had for a long while--the lack of same. If you are going to get employees up to speed then you really need people to BE there for the newby. Just dumping them on to a job site and expecting excellent work out of them right from the get go is not going to happen. I'm wondering about many of the 50 somethings right now and how they got into the jobs--there seemed to be those mentoring types then--in one shape or another as well. Pairing newbies with more 'seasoned' employees worked to a certain extent---maybe they'll have to do more of that.

Another thing is that we've gotten incredibly dumb with our infrastructure---we built them--and then ignored them thinking that one didn't need to work on them over time. Deferral of maintainence became the name of the game---saving the $$$ bill became more important than doing the job of keeping the infrastructure together. So now we're seeing bridges crumbling and roads crumbling and sewers and etc etc---falling on their rears---

Sometimes one needs to think outside the wallet-----

[henry6]

gabe

What is the challenge working for a lumber yard?  Do you get board?

Gabe

I planely saw you milling around here and barking up the wrong tree, so cut it out![

[blownout cylinder]

henry6

gabe

What is the challenge working for a lumber yard?  Do you get board?

Gabe

I planely saw you milling around here and barking up the wrong tree, so cut it out![

My mother would nail dad over his puns----these ones sound kinda rough grade--

[MP173]

Oltmann and RWM:

Bring me up to speed.

Why are the "50 somethings" leaving?  Is there a pension provision incentivizing their departures?

I am not sure if retirement is a prudent financial decision at this point in economic history, unless there are nice golden guarantees out there. 

The earlier discussion regarding comparing the PRR and SP 70 years ago to the second tier railroads is brilliant.  Our consumption patterns have changed dramatically the past five years.  Frugality is now a preferred and required lifestyle, at least for now.  "Detroit" and it's based automotive industry has changed dramatically.  Infrastructure which was near capacity such as the ex Wabash line seems to have lost considerable traffic and now has excess capacity.  Temporary or permanently?  Where do the railroads invest their capital going forward?  New government requirements will demand significantly more of that capital it appears.

 This is only a hunch, as I am an outsider, but when contracts terminate and are being renegotiated, downward pricing pressure could begin to creep in (certain markets such as coal or intermodal). 

ed

[CNW 6000]

Railway Man

 My group is going to lose 75% of its 50-somethings within the next 24 months.  The oldest, wisest person in the next cohort is 34.

RWM

If there's an exodus on the horizon, wouldn't it make sense that the RRs would be hiring or do they wait until people are gone to start the process?

[henry6]

I am beginning to conclude that the reinvention of the wheel is at hand!  And for several good and not so good reasons. 

The not so good reasons lay in two places concerning labor: 1) loss of qualified and experienced managers and workers due to retirements or layoffs.  This is a real threat and needs to be addressed immediately.  I've hearn rumors of companies losing their quality and competitive edge because of loss of this echelon and quantity of talent.  Often there are hirebacks in the form of consulting or contract work on the management level.  2). lack of avaiablity of new labor and inability of new hires to do quality and quantity of work.  This is something current managements have to deal with to make it to tomorrow. 3) Therefore both problems here could lead to neophytes coming in and "playing" train.

The other, the good reasons, for there being a reinvention of the wheel is that planners and managers (both private and public) of all forms of transportation are realizing they have a brotherhood of concerns and needs which has to lead to a rethinking of segeragated forms of transportation.  Over the next five to fifty years there will be more intergration and universal technologies to form an almost seamless carriage of people and goods from mode to mode, coast to coast (not endorsment of long distance passenger trains) for efficiency of fuel and equipment as well as for environmental concerns.  

Now I don't think there is anybody who believes the whole of the current system will be thrown away, there will be no throwning the baby out with the bathwater.  But there will be new ways of using, organizing, and integrating our transportation systems so much so that it might not look like the same groups of modes we see today.  Yes, its like reinventing the wheel building from a base that has evolved over the last 200 or so years.  My fear is that this will be done by all new blood who knows nothing about the collective values of the modes.  My hope is that we can keep enough old blood pumping through the debates to build rather than tear apart.  Maybe I'm using the "reinvention of the wheel" theory too loosley here.  But I do believe there has to be and will be major changes in our thinking, our technologies,and our philosophies to effect a transportation system and not seperate modes, for the future.

[Paul_D_North_Jr]

oltmannd

Railway Man

There are many challenges that are imagined.  But the largest is real, and it's the loss of skilled and experienced employees to retirement in the next few years, and a very thin pipeline of new employees behind them.

RWM

That is a huge issue around here, and I see some good things happening and some not so good. There are really two issues. One is how many are in the pipeline and the other is what is in the pipeline. The good news is that they have been hiring like mad to take advantage of what little time remains for the "50 somethings" so that some of the institutional knowledge can be transferred. Also good is that they have resisted the temptation to lay off any of the new hires in this down year. The new hires get at pretty good orientation (they call it a training program - it lasts 18 months - but it is really just an orientation). HR's recruiting team has been hiring some really bright people, but they have not kept an eye open for those with an "unhealthy" interest in railroading. This is unfortunate, in my view, the ones that do have an interest tend to stumble up the learning curve at a faster rate. [snip] The mass exodus of the 50-somethings begins in earnest this year - the future will be interesting....

Which is probably a good portion of the reason why Norfolk Southern gave a $100,000 grant to Penn State's Altoona Campus in August of this year to establish/ support a Railroad and Transit ngineering Degree program there.  See -  http://www.nscorp.com/nscportal/nscorp/Media/News%20Releases/2009/penn-state.html

- PDN. 

 

[Ulrich]

Given the state of the economy today and the outlook for the next five years, I'm surprised that a shortage of qualified people is viewed as the biggest challenge. I don't doubt it...you guys are more qualified and closer to the action than I am... but..I wouldn't have guessed labor shortage.

On a postive note (?)...there are now an awful lot of good qualified underemployed people out there.. I just got back from South Carolina, and got to talking to one the cleaners in the hotel I was staying in. The lady I spoke to says she's got degrees in engineering and physics but because she doesn't have American experience she's cleaning toilets.  I see it my industry too...more truck drivers and dispatchers are computer literate and often have advanced training in something...the proverbial dummy HS dropout is becoming extinct.

There may come a temporary shortage..but there are alot of intelligent people out there who will do your job and mine, and will take half the time to learn it.  

 

[diningcar]

Perhaps we should consider the United States Congress!!

Individually there are many bright people serving, probably mine and yours. But collectively they are a disaster with all of the 'buying' votes with earmarks and tradeoffs. And the 'whats good for our party' motivation. The damage they do cannot easily be undone. All new members with the finest intentions find they must play along to get along. And far too many are lawyers or people with no experience in the private sector.

I have come to the conclusion that they could not organize a turtle race with only one entrant. Many, like me are independents and more are becoming so by increasing numbers.