(The following story by Jeanne Bonner appeared on The Morning Call website on December 19.)
ALLENTOWN, Pa. — While the employment outlook remains uncertain in the Lehigh Valley for 2005, one company that is hiring and will be hiring for several years to come is Norfolk Southern Corp.
The Norfolk, Va., railroad company is hiring 30 to 40 people at its Allentown operation, where it already employs 300 to 400 people. The company is looking to hire conductor trainees who could eventually become locomotive engineers.
Norfolk held two hiring sessions last week in the Lehigh Valley and will hold two more this week.
The hiring burst comes as the company anticipates a wave of retirements. Norfolk Southern also is seeing increased freight business as the commercial railroad industry experiences record growth this year.
The aggressive hiring is an industry-wide trend. The Association of American Railways said earlier this year the industry would hire 80,000 workers in the next six years.
”We have an aging industry,” said Tom White, a spokesman with the industry association. ”Because we have an aging industry, we have a lot of people reaching retirement at the same time.”
On top of mass retirements, the volume of freight shipments in the United States has risen 5 percent so far this year from 2003, which had been a record year.
”Just to handle the volume of traffic that is coming we need more people,” White added.
Norfolk Southern has hired 2,000 people this year companywide and plans to sustain that level for the next four to five years, said spokesman Rudy Husband.
Norfolk Southern has reported strong earnings this year. For the quarter ended Sept. 30, Norfolk Southern reported record revenues of $1.9 billion, up 16 percent from the same period last year. The company reported net income of $288 million for the quarter.
The railroad industry tends to thrive when the economy is strong and consumer spending rises. That’s because the rail industry transports an evolving array of consumer and industrial goods coast to coast.
About 70 percent of automobiles produced in the United States are transported off the assembly line by train. Railroads also carry a lot of component parts for cars and for large industrial equipment. Boeing, for example, moves parts for its airplanes from Kansas to Washington state by train, White said.
Norfolk Southern reported revenue from the transport of general merchandise rose 10 percent to $1 billion in the third quarter. ”The purchases people were putting off a year ago, they are making them now,” Husband said.
An increase in imports has also kept the rail industry busy. As more goods are produced overseas and brought by ship to the United States, manufacturers need to get them from ports on the East Coast and West Coast to inland cities. Railroads benefit because the goods typically have to travel farther than if they had been made in the United States.
Railroads compete with trucks for freight shipments. The railroad industry has not opened new routes in recent years, while the trucking industry has benefited from federal funding for highways. Now things are beginning to change. Analysts following the railroad industry say trains will continue to win back market share from the trucking industry in 2005 as it has done for most of this year. That’s partly because trains are three times more fuel-efficient than trucks. One train can carry the equivalent load of 280 trucks with only a two-person crew, White said.
The current high fuel costs, in fact, will magnify railroads’ superior fuel economy over trucks, according to Fitch Ratings, which is predicting rail revenue and volume will continue to rise next year.
The trucking industry has become a top customer of the railroads. One of the biggest users of rail freight services, for example, is the United Parcel Service, White said. Trucking companies often transport goods from warehouses to a railroad intermodal facility, where they are packed onto container boxes and loaded onto trains.
One such facility is in South Bethlehem on former Bethlehem Steel property. Norfolk Southern operates out of a truck-to-train intermodal facility in South Bethlehem that is known as BethIntermodal.
”It is likely, in fact, that the trucking industry will contribute directly to higher rail revenue as it finds intermodal trains an increasingly cost-effective way to move trailers and containers over long distances,” a Fitch report said this month.
The hiring news at Norfolk Southern is welcome, particularly in the Lehigh Valley where layoff announcements have not ceased. Since September, Agere Systems, TriQuint Semiconductor and D&B have laid off workers here.
Hiring, however, can be a challenge for railroad companies. The work is often hard, physical labor and employee schedules frequently stretch over nights, weekends and holidays. Workers must submit to background checks.
White of the Association of American Railways said the tough conditions contribute to the sector’s high salaries. Average annual wages among the top seven railroad companies, including Norfolk Southern, were $61,920 last year.
”We are a 24/7 business and we don’t take days off,” White said.