Rail industry headcount shrinks

The declines come as the railroads face the double whammy of the coronavirus pandemic and a sharp decline in coal carloads. The pandemic’s social-distancing and shelter-in-place mandates have squashed demand for goods, with April carloads for motor vehicles and parts tumbling 86.3% and carloads for chemicals falling 11.9%, according to the Association of American Railroads. The social-distancing mandates also cut demand for passenger rail. Meanwhile, coal carloads fell 38% in April amid sluggish domestic and international demand.

These two factors contributed to decisions to lay off or furlough employees at Union Pacifc (NYSE: UNP), BNSF (NYSE: BRK) and Norfolk Southern (NYSE: NSC), among others.

“In today’s rapidly changing environment, Norfolk Southern continues to focus on ensuring that we have the optimal number of people and assets at every location across our system in order to operate safely and efficiently. Along those lines, approximately 30 job assignments from Norfolk Southern’s Transportation Department were repositioned from Williamson Yard to Bluefield, West Virginia, and Roanoke, Virginia, over the past weekend,” NS said on May 12. Seniority-based provisions in the applicable collective-bargaining agreements will govern which employees hold these assignments, NS said.

NS also said it idled the hump yard at the Linwood Terminal in North Carolina, which would entail the cutting of approximately 85 positions this month. The railroad said it would continue to provide switching service to local customers.

Meanwhile, BNSF recently announced plans to close maintenance facilities in Glendive, Montana, and Donkey Creek and Guernsey, Wyoming, as well as reduce BNSF’s mechanical workforce at other locations. About 350 mechanical positions would be affected. BNSF said it has provided an option for some employees to transfer to open positions elsewhere.

The decision to close was “in response to our customers’ changing business conditions and projected lower demand for rail cars to ship commodities,” BNSF said. The Montana and Wyoming facilities have access to Western coal production.