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Railroads continue cutbacks to cope with freight declines

by on
in Leaders & Managers

A wave of layoffs and other cutbacks are striking the railroad industry as the economy’s recession continues to drop freight volumes.

Railroad chief executive officers say reducing their expenses is the only way to stay profitable amid the current economic upheavals.

“We are responding by aggressively controlling costs, while enhancing our service and continuing to invest in projects that will drive future growth,” Norfolk Southern Railway Chief Executive Officer Wick Moorman said when the company’s first quarter earnings were announced. “This approach will position us to participate in the economy’s eventual recovery as we tightly manage the company in the face of an ongoing reduction in railway traffic volumes.”

In New York, CSX Transportation announced it is cutting rail car service through its Frontier Rail Yard in Buffalo by about half. Currently, about 800 rail cars are processed through the switching and sorting yard daily.

The Frontier Yard also is used by Canadian National Railway and Norfolk Southern Railway.

“CSX expects significant reductions at Frontier, but that there are no plans to close the yard at this time,” CSX spokesperson Robert Sullivan said in a statement. “While a small number of reductions will begin immediately, the larger number is not yet determined.”

The announcement met resistance from local business leaders and the Brotherhood of Locomotive Engineers and Trainmen, who said cutting back service through the Frontier Yard would hurt the local economy and result in layoffs of about 250 workers.
 
Dozens of shippers use the yard, including companies such as ADM Milling, Goodyear, General Mills, Nabisco, Sunoco, Weyerhauser and DuPont Chemical Co.
 
Norfolk Southern also blamed the economy when it announced it was laying off 58 employees at its Juniata Locomotive Shop in Altoona, Pa. The workers are primarily machinists and sheet metal workers at the shop.

The layoffs are reducing the Juniata workforce to about 900 employees. Since December, Norfolk Southern has rid itself of about 1,100 workers – or 4 percent of its workforce – largely through furloughs. Norfolk Southern laid off another 13 workers last month at its yard in Williamson, W.Va., leaving just 79 mechanical employees.

In addition to the April 29 layoffs, Norfolk Southern has furloughed 43 workers at its Williamson yard. Some of the workers are being offered jobs at the railroad’s yard in Portsmouth, Ohio.

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