Tag: Martin J. Oberman

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As the recently retired Chairman of the Surface Transportation Board, I’m writing to urge your participation in the 2024 election. My experience taught me that the protections of rail workers by the STB and by the FRA depends a lot on whether these important offices are filled by worker-oriented administrations. A few key points show why this is true.

Before I joined the STB more than five years ago, rail labor viewed the STB as indifferent to rail worker interests at best, and hostile at worst. Back then, the Class Is were implementing PSR and dramatically cutting employment — ultimately eliminating nearly 45,000 good rail jobs. But under prior Republican-led STBs, these practices were allowed to flourish. That changed in my time as chair.

For those that don’t know the STB is an independent federal agency responsible for overseeing the economic regulation of different types of surface transportation, with a strong focus on freight rail. The STB uses its authority to address disputes and promote a transportation system that serves the needs of everyone involved, including SMART-TD members.

While the STB cannot solve all the issues facing rail labor, I believe that the Board’s focus under the current Democratic leadership on improving rail service and, most importantly, on maintaining and growing a robust workforce has had a significant impact on holding the line against more massive rail layoffs.

After President Biden appointed me as chair and the Board had a Democratic majority, the board began to take action.

In the spring of 2022, we held unprecedented hearings on the service problems of the industry that were the result of the mindless job cuts and senseless resource reductions by the Class Is. Top executives of the Class Is were called in and questioned by the board.

For the first time, rail labor leaders were invited to address the board in a formal hearing. After the hearings, and despite their objections, we ordered the Class Is to provide monthly performance updates, with an emphasis on public reporting on employment — hiring, training, and, crucially, retention.

Later in 2022, with UP effectively denying service to many customers, largely as a result of low numbers of employees, we held special public hearings on UP’s actions.

As a result, the Class Is began to increase employment for the first time since the start of PSR, especially in the operating crafts.

The board was able to take other actions to protect workers. In approving the CSX-Pan Am transaction, we obtained a commitment by CSX to go beyond the standard protections and to ensure that any employee who lost a job would be offered one in a different craft or location.

In the CP-KCS transaction, for the first time, the board imposed a condition that if the carriers proposed to combine territories where two agreements applied and sought to have only one agreement, the affected union, not the carrier, would get to pick the agreement (contrary to prior mergers where the carrier got to choose).

With a Democratic majority, I was able to make sure that the Board added rail labor leaders to the board’s most important industry advisory committees — where labor’s voices had been lacking for too long.

The Board also coordinated with the FRA on issues related to service, safety, and employment. Indeed, the Biden FRA under Amit Bose has been the virtual opposite of the FRA under the prior Administration.

Among other things, it issued a two-person crew rule, fulfilled a 17-year-old legislative directive for certification of signalmen and dispatchers, revived the Rail Safety Advisory Committee (that includes rail labor), and put the brakes on the near-automatic issuance of waivers of safety regulations under the prior administrator.

As you can see, who appoints leaders to these important railroad regulatory positions makes a huge difference to you and the quality of your work life. Had there not been a change in the White House, the STB, and the FRA would have permitted the railroads’ corporate greed-driven operational models to remain unbridled. Thankfully, I was empowered and entrusted by President Biden to do the right thing and hold the Class Is accountable.

In order to make sure that the STB and FRA will continue to respect rail workers and that rail unions will have a place at the table and will be listened to, we will need an administration that will appoint officials who care about rail workers and continue the aggressive oversight of the railroads by the current Democratic-led STB and FRA. Support for the Democratic ticket — both for president and for the Senate and House of Representatives — because my experience taught me that the protection of rail workers is quite realistically at stake.

I strongly urge you to vote for Kamala Harris and Tim Walz to ensure that the STB and FRA will continue to provide the energetic oversight of the railroads which is essential for all of us to thrive and prosper, and to do so safely.

Best,
Marty Oberman
Former chairman, Surface Transportation Board

Surface Transportation Board Chairman Martin Oberman joined the STB in 2019, the same year that I became the president of the SMART Transportation Division. In the five years we have been in our positions, many of the battles Marty and I have fought have been the same.

At STB, Oberman has been dedicated to making the rail industry work for the American people and our economy. What made him stand out is that he understands what SMART-TD and rail labor do to make that happen. He has always, very appropriately, seen labor as a partner in the solutions and in the industry.

Ever since he was with Metra working with SMART-TD members to keep Chicago’s passenger rail flowing, Marty has seen value in the experience and wisdom of crews on the front line. When he became a member, then chair of the STB, this mentality came with him — the people on the ground and in the cab are the ones making things work.

Oberman has gone out of his way to give SMART-TD and rail labor a voice in the direction of the industry. This has earned him tremendous respect from this organization’s leadership and from our members.

His no-nonsense, common-sense approach has served this country well, as well as providing many YouTube-worthy quotes and awkward moments for railroad executives who faced his questions. It’s been therapeutic at times to see Oberman demand accountability from rail executives who are so accustomed to dictating the situation to their will.

STB Chairman Martin Oberman addresses the SMART Leadership Conference via video in San Francisco, Calif., in 2022.
STB Chairman Martin Oberman addresses the SMART Leadership Conference via video in San Francisco, Calif., in 2022.

He has been an ally in our fight to get the nation out from under the thumb of Precision Scheduled Railroading. He’s used his clout as chairman to rally against rail carriers’ abuses of shipper embargoes. In recent months, he’s been an outspoken critic of a hedge fund’s hostile takeover of Norfolk Southern.

When given the choice, he’d prefer the industry concentrate on serving shippers and valuing its employees instead of seeing profit and operating ratios as the chief determinants of success. Throughout, he’s seen rail workers as key to this country’s economy, not as enemies of Wall Street investors. This core belief shines through in his time leading the Surface Transportation Board.

Martin Oberman is a friend of the American rail worker. I‘m proud to say that he has become a friend of mine.

When a champion of our cause retires or, as we like to say, “pulls the pin,” it’s a hard pill for the rest of us to swallow. But looking at the structure of the STB today and the watchdog role this board has carved out under Marty’s leadership, it is evident that his legacy will last for decades to come.

I want to personally wish Marty a long and happy retirement with his wife, Bonnie, beginning today. I and every hard-working American in the industry appreciates the fearlessness with which you served the STB and the nation.

Jeremy R. Ferguson,

President, Transportation Division

U.S. Rep Peter DeFazio (D-Ore.) testifies before the House Rail and Pipelines Subcommittee on May 12.

Following up a hearing in late April on freight rail problems caused by Precision Scheduled Railroading (PSR), members of the Surface Transportation Board appeared before the U.S. House Rail and Pipelines Subcommittee on May 12 to further discuss steps to be taken to heal the nation’s supply chain.

U.S. Rep. Peter DeFazio delivers his statement on PSR.

“We are at a point of crisis, and we have to deal with that crisis meaningfully,” U.S. House Transportation and Infrastructure Chairman Peter DeFazio (D-Ore.) said. “Freight service in the United States in America, we used to have the best freight rail in the world, is abysmal.

“The evil ghost of Hunter Harrison lives on. The legacy of this man is disgusting, what he did he has addicted the CEOs of the rail industry to watching the ticker on Wall Street and using their resources to benefit their shareholders and not run railroads like railroads.”

DeFazio mentioned an unlikely alliance — shippers, energy and chemical companies, oil companies, big agriculture and rail labor — coalescing as Class Is’ service-averse PSR scheme continues to rake in record profits and benefit shareholders and CEOs.

“We’ve got to act more decisively and more quickly,” DeFazio told the STB members. “We’re going downhill here really quickly. You’re not there to protect the bottom line of these railroads and the CEOs’ bonuses. You’re not there even for the shippers’ bottom line. But are there to make this system work better, keep costs lower and be competitive.

“I want freight railroads to be successful … but that success should be defined by the amount of freight they move across the nation, the amount of greenhouse gas they prevent and the safety of their employees and the communities they traverse. Stock buybacks, dividends can’t be the measure of success for freight rail in this country.”

Surface Transportation Board Chairman Martin Oberman was appointed by President Biden in January 2021 after 29 percent workforce cuts that began before the COVID pandemic’s start — a total of more than 45,000 employees — these cuts can be linked to the current deteriorated service.

Surface Transportation Board Chairman Martin Oberman testifies before the subcommittee on May 12.

“The railroads could not possibly have screwed up this stuff anymore than they are doing on their own. There’s nothing we could do to make it worse right now. It is in terrible shape as has been indicated by members of the committee and at our hearing,” Oberman said. “They’ve cut labor to below the bone, really. They have thousands of locomotives that they’ve mothballed … That’s the big picture. That’s the overview that concerns me most. In order to make up for their shortage of labor, they’re overworking and abusing the workforces they have. Long-term employees are literally leaving. So you’re not only [dealing with] a shortage of workers but you’re losing a tremendous amount of institutional knowledge.

“Rail labor reports particular difficulty directly caused by increased job uncertainty, worsening working conditions and insufficient incentive,” he said. “I am not optimistic about significant improvement in service in the near term.”

The STB’s April 26 hearing resulted in a unanimous rulemaking mandate made days later that Class I carriers be required to detail on-time performance for first- and last-mile service, submit recovery plans and provide frequent updates to the board. A notice of proposed rulemaking also would provide emergency relief for rail customers in urgent need of rail service.

U.S. Rep. Steve Cohen asks about the BNSF “Hi-Viz” policy.

U.S. Rep. Steve Cohen, a Tennessee Democrat, brought up the “Hi-Viz” attendance policy that BNSF enacted in February, noting a letter he received from a 13-year retired veteran engineer that talked about the new challenges the punitive points-based attendance policy had given him in facing his medical challenges.

“Demands on employees have only increased,” Cohen said. “These unreasonable expectations are driving people out of the industry. They’re doing the minimum, which the federal government requires on FMLA and some other things, but they ought to be doing more than the minimum to bolster the workforce, care for their employees and bolster the rail industry in general.”

The low workforce levels are making it harder for service to recover, these “irresponsible” business cuts and layoff decisions by the railroads have also made people not want to come back, Oberman said.

“What could not be more clear is that the railroads do not have significant redundancy. It’s quite clear to me that they don’t have a cushion. As I have said many times, you wouldn ‘t send a football team out on the field without a backup quarterback. But what the railroads have done is just that,” he said. “They have set the rail crew levels at levels when they have no backup. So when there was COVID, when there’s a vortex, when there’s any disruption of workers getting to the job, the trains stopped running.

“Remember, when you lay off an experienced engineer or conductor and there’s no assurance they’ll come back and many of them did not — they went into other industries. To replace that person under FRA restrictions and just general common sense requires six months of training.”

U.S. Rep. Troy Nehls gives incorrect information about rail workers’ salaries.

U.S. Rep. Troy Nehls (R-Texas), railing against inflation and union density in the rail industry, himself produced some inflated and inaccurate estimate of the average Class I rail employee’s salary as being $137,000.

“At the hearing we had two weeks ago, the railroads came in and proudly proclaimed that they were trying to hire new conductors at $52,000 a year, not $137,000, and when I asked them how they were going to compete with Wal-Mart hiring truck drivers at $110,000, they didn’t have an answer,” Oberman countered.

U.S. Rep. Stephen Lynch of Massachusetts clears up misinformation by U.S. Rep. Troy Nehls about salaries of rail workers.

Nehls’ inaccurate statement also was later corrected by Rep. Stephen Lynch of Massachusetts, who also noted that rail workers were not rewarded for working through the pandemic and that nation rail contract negotiation have dragged on for more than two years.

“You can see the attention that the railroads have given to labor when you look at how much they’ve cut the labor force and how much they’re not respecting and looking out for their best interest, you can see that. They’re giving more money to their shareholders. There hasn’t been one major bonus or pay raise in those couple years that they’ve been working us out of COVID. No hint towards that,” STB member Robert Primus said.

STB Member Karen Hedlund also referred to the longer trains PSR uses that frequently dwarf the sidings on the lines, causing congestion and obstructing passenger rail’s on-time service and suspects that STB will need to address it.

“There’s one long-distance line that was above 80 percent,” she said. “Some of the shorter lines perform over 80 percent, but the long-distance lines do not perform well. When there’s a three-mile-long train in front of a little Amtrak train, the three-mile-long train may not be able to get out of the way for many, many miles.”

Class I railroad officials have a two-day-long hearing before the federal Surface Transportation Board (STB) to prepare for later this month.

Reports from shippers to STB regarding poor service — the latest being a letter directly from the National Grain and Feed Association, a group representing more than 8,000 facilities — as well as a letter from Transportation Division President Jeremy Ferguson regarding precision scheduled railroading (PSR) and the self-inflicted worker shortages that have come with it have led up to the April 26 and 27 hearing.

The board, an independent and bipartisan federal agency charged with the economic regulation of various modes of surface transportation, primarily freight rail, announced the meeting April 7 in the light of indications of poor performance data.

“Rail network reliability is essential to the Nation’s economy and is a foremost priority of the Board. In recent weeks, the Board has heard informally from a broad range of stakeholders about inconsistent and unreliable rail service. The Board has also received reports from the Secretary of Agriculture and other stakeholders about the serious impact of these service trends on rail users, particularly with respect to shippers of agricultural and energy products. These reports have been validated by the Board’s weekly rail service performance data.”

Board Chairman Martin Oberman went into additional detail about how job cuts in particular have hampered the carriers.

“I have raised concerns about the primacy Class I railroads have placed on lowering their operating ratios and satisfying their shareholders even at the cost of their customers.  Part of that strategy has involved cutting their work force to the bare bones in order to reduce costs,” he said. “Over the last six years, the Class Is collectively have reduced their work force by 29% – that is about 45,000 employees cut from the payrolls.

“In my view, all of this has directly contributed to where we are today – rail users experiencing serious deteriorations in rail service because, on too many parts of their networks, the railroads simply do not have a sufficient number of employees.”

Carriers summoned to appear include BNSF Railway Company, CSX Transportation, Inc., Norfolk Southern Railway Company, and Union Pacific Railroad Company. Executive-level officials from the other three Class Is also were invited to attend, as were labor organizations and shippers.

The hearing will take place at the Board’s headquarters in Washington, D.C., with each session beginning at 9:30 a.m.

On May 27, the chair of the federal Surface Transportation Board (STB) Martin J. Oberman reached out to all Class I CEOs asking them whether the carriers are prepared to reverse the workforce cuts they have made in anticipation of handling an economic rebound as the coronavirus pandemic wanes.

Oberman

“I am specifically requesting that you also address whether you have any long-term plans, including your hiring plans for 2021 and 2022, to reverse any of the diminishing workforce levels which have resulted from your strategies in recent years,” Oberman said in his letter.
Rail employment data collected by the board indicate that since the onset of the COVID-19 pandemic in March 2020, that overall Class I rail employment has declined from 127,867 to 115,485, a reduction of 12,382 jobs. Train and engine personnel employment has been reduced by Class Is by nearly 5,000 workers from 51,801 in March 2020, to 46,951 in April 2021, the latest month for which STB data is available.
Oberman expressed concern that recent rail service problems reported by some shippers may relate to that broader trend of rail labor reductions over the last several years in addition to the furloughs and quarantines brought about by the COVID-19 pandemic.
“I recognize that these rail service challenges, at least to some extent, have been related to workforce reductions resulting from COVID-19 cases, quarantines, and furloughs based on the temporary decline in demand and the resultant adjustments made by railroads in nearly every facet of their businesses,” he wrote. “But I am also concerned by the extent to which these service issues may be related to or exacerbated by a broader trend of rail labor reductions that has been occurring over the past several years.”
Precision Scheduled Railroading (PSR), adopted by CSX under the helm of the late E. Hunter Harrison, has become an acceptable operating scheme among the largest U.S. railroads focused on reducing operating ratios by lengthening trains and emphasizing cost reductions by slashing employment, reducing the time available for inspections and mothballing equipment, as reported by The Associated Press and VICE Magazine.
From an economic perspective, Oberman said the STB has received some significant reports of flaws in the Class Is’ service model.
“Although many shippers have reported that railroads are providing consistent and dependable service, the Board has also received concerning reports from a meaningful number of rail customers of subpar performance, including missed switches, railcars delayed at intermediate yards or interchanges, extended out-of-route movements, and prolonged dwell at origin for some unit train traffic,” Oberman observed. “Additionally, we have been made aware of instances of significant congestion at various intermodal facilities, which has resulted in delayed train arrivals and disruptions to container availability.”
A review of share prices since Harrison was placed atop CSX by a hedge fund in March 2017, shows that shares for most of the Class I carriers have more than doubled since March 2017, except for Canadian National and BNSF (which is privately owned).
Conversely, STB rail employment data from April 2021, indicate that overall Class I employment has declined by nearly 34,000 jobs from 149,323 in March 2017, while train and engine personnel employment has gone down by 12,240 jobs from 59,191 in March 2017.
SMART Transportation Division President Jeremy Ferguson said he was pleased to see STB Chairman Oberman and the board taking an active role in protecting rail shippers and making sure T&E crews are properly staffed.
“This is a good first step in getting people back to work and getting the rail workforce to an adequate level,” President Ferguson said. “Let’s get our members some relief so they’re able to receive adequate rest and a quality of life they deserve.”
Link to STB article regarding the letters.
Link to STB site with Oberman’s letters to carrier executives.