(The Virginian-Pilot posted the following article by Gregory Richards on its website on March 16.)
NORFOLK, Va. — Norfolk Southern Railway Co. and two of the country’s other big railroads said they are reducing hiring this year after rapidly increasing their ranks during the past two years.
Faced with record demand for freight hauling and a wave of retirements, the railroads called all aboard for workers to run the trains and tend the rails. N ow, they say, they’ve hired to meet the demand.
“We’re set to handle increased business,” said Susan Terpay, spokeswoman for Norfolk Southern, the nation’s fourth-biggest railroad.
The Norfolk-based carrier will have hired 5,600 employees between 2004 and 2006, peaking at 2,400 brought aboard last year.
That aggressive hiring drive will taper off this year to about 1,800 employees, a more “normal” level that Terpay expects to continue for several years. The company has approximately 30,000 employees.
Both Western railroads are mirroring Norfolk Southern’s hiring trend. Union Pacific Railroad, the nation’s biggest, said it plans to hire between 2,500 and 3,000 employees this year, down from about 4,500 in each of the past three years, said Mark Davis, spokesman for the Omaha, Neb.-based company. The Burlington Northern Santa Fe Railway Co. expects to add roughly 3,800 employees in 2006, a drop from 4,500 last year, said Pat Hiatte, spokesman for the company based in Fort Worth, Texas .
CSX Transportation, Norfolk Southern’s rival in the East, is bucking this trend. The railroad, based in Jacksonville, Fla., anticipates hiring 3,500 workers this year, 1,000 more than last year, said spokesman Gary Sease. The uptick is needed based on projected business needs, he said.
Overall, the hiring – mostly of engineers, conductors and maintenance workers – has reversed decades of job losses brought about by industry restructuring and increased use of technology.
The employment of the largest railroads hit 165,000 in 2005, up from 155,000 in 2003, according to the Association of American Railroads. In 1980, that figure was 458,000.
One Wall Street analyst said the fall off in hiring was expected because it would be “unrealistic” for the rapid pace to continue.
“We’ve gone from cutting heads to gaining heads, but not at the rate we saw last year,” said Anthony Hatch, an independent railroad analyst.
Besides needing additional workers to handle a spike in freight volume, the railroads must fill positions vacated by large numbers of early retirees.
Because of a change that took effect in 2002 in the Railroad Retirement System, a federal pension plan for railroad employees, workers with 30 years of service can retire with full benefits at age 60. They previously had to be at least 62.
Wick Moorman, Norfolk Southern’s chairman, president and chief executive officer, said hiring fewer workers should allow the company’s productivity to increase. Like all U.S. railroads, Norfolk Southern lagged last year in productivity. Ton-miles of freight moved per employee, an industry yardstick, dropped 3.7 percent.
Norfolk Southern boosted employment by 5.4 percent in 2005, more than its 4 percent growth in shipments.
Frank Wilner, spokesman for the United Transportation Union, which represents conductors, said fewer hires might worsen the delays that some railroad customers have been experiencing in receiving their shipments.
Hatch said rail congestion is less a byproduct of employyment levels and more an offshoot of not enough locomotives, railcars and track.
Norfolk Southern’s stock reached a 52-week high Wednesday of $53.92 in trading on the New York Stock Exchange.