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Chairs DeFazio and Payne, Jr. Request GAO Study on the Impacts of Precision Scheduled Railroading on Workers, Safety and Shippers

May 13, 2021

T&I Chairs to GAO: “Stakeholders are concerned that the rise of the PSR model has come at the expense of long-term capital investments, reduced rail infrastructure, affected service for some shippers, and caused dramatic workforce cuts and safety concerns”

WASHINGTON, D.C. — Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) and Chair of the Subcommittee on Railroads, Pipelines, and Hazardous Materials Donald M. Payne, Jr. (D-NJ) are requesting the U.S. Government Accountability Office (GAO) to examine the impacts that the implementation of precision scheduled railroading (PSR) by Class I railroads is having on workers, safety, freight shippers, passenger railroads, and long-term management of the nation’s railroads.

“PSR in practice means the bottom line drives the decisions,” said Chair DeFazio. “Longer trains, unhappy shippers, and a workforce pushed to do more with less is not a model to chase after – unless you’re on Wall Street. But we can’t let hedge fund managers write the rules of railroading. Last Congress, my Committee heard from various stakeholders concerned for the immediate and long-term impacts of PSR. This study, passed by the House last year in my surface transportation reauthorization bill, the INVEST in America Act, will help us find ways to address the impacts this railroad management strategy has on workers, freight shippers, passenger railroads, and rail safety.”

“Precision scheduled railroading is being used more and more throughout the rail industry,” said Rep. Donald M. Payne, Jr. “But I am concerned that this strategy could come at the expense of worker safety and smart, long-term railroad management. We need more information about this practice to determine whether it is beneficial or harmful to our nation’s railroad system.”

 The full letter text can be found below and here.

 May 12, 2021

The Honorable Gene L. Dodaro

Comptroller General of the United States

U.S. Government Accountability Office

441 G Street, NW

Washington, D.C. 20548

 Dear Comptroller General Dodaro:

            In recent years, numerous stakeholders have raised concerns about the railroad management strategy known as precision scheduled railroading (PSR). Using variations of this strategy, it appears that Class I railroads have streamlined operations and otherwise cut costs in pursuit of lower operating ratios for short-term revenue gains. Stakeholders are concerned that the rise of the PSR model has come at the expense of long-term capital investments,[1] reduced rail infrastructure,[2] affected service for some shippers,[3] and caused dramatic workforce cuts[4] and safety concerns.[5]

            In light of the importance of the issue, the railroads’ common carrier obligations, and Amtrak right of preference, we ask that you study the impact on freight rail shippers, Amtrak, commuter railroads, railroad employees, and other affected parties due to changes in freight railroad operating and scheduling practices as a result of the implementation of the PSR model. 

            At a minimum, please examine the impact of PSR on:

(1)         train size, including use of longer trains, and the corresponding safety and service effects;

(2)         safety impacts associated with reductions in workforce, including occupational injury rates, impacts to inspection frequencies, inspection adequacy, repair quality, and changes in workforce levels;

(3)         the elimination or downsizing of yards, repair facilities, and other operational facilities;

(4)         increases in demurrage or accessorial charges or other costs to shippers;

(5)         capital expenditures for rail infrastructure;

(6)         changes to dispatching practices and locations of dispatching centers;

(7)         increases to the size of signal territories;

(8)         the on-time performance of passenger trains;

(9)         the quality, availability, and reliability of service to freight shippers within a range of industries, particularly shippers that are small and/or geographically remote; and

(10)      railroads’ ability to respond to changes in demand or market conditions, particularly in light of reductions in capital asset and workforce levels.

            Please provide a report summarizing the study and its results, including recommendations for addressing any impacts of PSR on labor, freight shippers, passenger railroads, or railroad safety.

                                                                        Sincerely,

Peter A. DeFazio

Chair

Donald M. Payne, Jr.

Chair

Subcommittee on Railroads, Pipelines, and Hazardous Materials



[1] Jim Blaze. “What’s the 2020 Outlook for Railroad Capital Expenditures?” Railway Age. Available at: https://www.railwayage.com/regulatory/whats-the-2020-outlook-for-railroad-capital-expenditures/

[2] 2020 Morgan Stanley 8th Annual Laguna Conference Presentation.  Norfolk Southern. Slide 4. Available at: http://www.nscorp.com/content/dam/nscorp/get-to-know-ns/investor-relations/presentations/2020/Morgan-Stanley-2020-presentation.pdf

[3] Paul Ziobro. “Railroads Want to Move Faster. Shippers Are Paying a Price.” The Wall Street Journal. May 29, 2019.

[4] 2020 Morgan Stanley 8th Annual Laguna Conference Presentation.  Norfolk Southern. Slide 5. Available at: http://www.nscorp.com/content/dam/nscorp/get-to-know-ns/investor-relations/presentations/2020/Morgan-Stanley-2020-presentation.pdf

[5] Aaron Gordon. “‘It’s Going to End Up Like Boeing’: How Freight Rail Is Courting Catastrohpe.” Vice. Available at: https://www.vice.com/en/article/y3gnnv/malaysia-train-mrt-traffic-public-transportation-problem

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