(The Associated Press distributed the following article on April 28.)
WASHINGTON — The freight railroad industry is kicking its recruitment efforts into high gear to counter an anticipated surge in retirements over the next decade, as well as a stodgy image that executives say hinders their ability to lure young blood.
The hiring and marketing push — including local and national advertising, listings on online job services and working with schools — also comes at a time when business is improving faster than expected and railroads face costly congestion on their tracks.
Earlier this month, Union Pacific Corp., the nation’s largest railroad, was forced to turn down some business because of crew shortages and it paid to have UPS packages, normally carried by express rail, trucked across the country.
“When I look forward five years out or eight years out, I think our biggest challenge is going to be recruiting and retaining employees,” Matthew K. Rose, the chairman and chief executive of Burlington Northern Santa Fe Corp., said Wednesday.
Rose said rivals are contemplating collaborating on an advertising campaign to “drive up the professional image of our industry.” He said the industry needs to do a better job emphasizing the importance of logistics and technology to modern operations, though he conceded much of the demand is for physical laborers willing to work outdoors, regardless of the weather.
At the end of last year, about 220,000 workers were employed by the rail industry nationwide. About 40 percent of that labor force is eligible to retire by 2014, according to the Association of American Railroads.
The Washington-based trade group estimates that 80,000 new workers will be hired by the end of the decade and additional 60,000 employees will be added by 2014.
The number of rail workers eligible to retire was accelerated two years ago after Congress amended the Railroad Retirement Act to reduce the age at which workers with 30 years of service could receive full benefits from 62 to 60.
In recent years, the nationwide hiring slump made it easier for railroads to replace retirees when necessary. The recruiting challenges were masked by the economic downturn, which sapped strength from the manufacturing sector and allowed the industry to operate while letting its labor force shrink from attrition.
Now, with shipments of coal, grain and consumer goods on the rise, executives are faced not only with replacing retirees, but with having to add to the work force.
Burlington Northern, for example, expects to hire 1,800 employees in 2004 — adding 600 to 800 new jobs.
“When business volumes change radically, as they have in the past six to eight months, it can prove challenging to have enough resources in the right place,” said Rose, who described recent track congestion as a “temporary service issue” that will soon be worked out.
Union Pacific Corp., whose traffic snarls occurred in the West and Southwest, has already hired 2,400 workers this year and plans to bring 1,800 more aboard by the end of 2004 — mostly in Texas and California, according to Barbara Schaefer, the company’s senior vice president of human resources.
“Frankly, the business just started coming back a lot faster than we had projected,” said Schaefer, who has been doing interviews on local radio stations around the country to get the word out on the industry’s hiring plans.
Entry-level brakemen, the people who put together and take apart trains in rail yards, earn $40,000-$50,000 a year, plus benefits, Schaefer said, and their salaries can climb to more than $70,000 in just a few years. Another selling point Schaefer makes is that railroads aren’t outsourcing or offshoring jobs.
“We move stuff even if it’s made in China,” she said.
Indeed, a major contributor to the industry’s recent growth has been the intermodal business — freight trains that haul truck trailers packed with goods — and much of that ties into the international shipping business.
On Tuesday, Burlington Northern said its first-quarter earnings rose 3.2 percent to $193 million. The company raised its profit forecast for the year based on expectations of rising imports of consumer goods from Asia and an increase in grain exports.
Union Pacific, meanwhile, has warned that it would not meet its first quarter earnings forecast in part because of the crew shortages.