Sunday, June 13, 2004

Workin' on the railroad

Freight industry chugging right along

By John Eckberg
The Cincinnati Enquirer

Reports of the demise of the railroad freight industry appear to be premature.

In fact, U.S. railroads say they expect to hire 80,000 workers before the end of the decade - and about 2,000 of those are likely to be in Greater Cincinnati.

The growth in employment in an industry that provided jobs for about 221,000 Americans in 2003 is coming just as the aging baby boom workforce begins to retire from the railroads and hemispheric economic growth is sparking more demand for railroad-car space to ship freight and consumer goods across the United States.

Barry Baker, right, and J.D. Loftin, both freight carmen at the CSX Queensgate train yards, exchange a laugh after coupling the airhoses between all the cars on an outbound train.
(Meggan Booker photo)
Though total track-miles have fallen from 319,000 in 1970 to 170,000 last year, that decline has not led to a corresponding swoon in rail transit. In fact, companies are increasingly turning to railroads to move material, in part because:

• Highway congestion and new federal regulations restricting the hours that truck drivers can remain behind the wheel are making less-congested rail lines a viable alternative.

• As fuel prices continue to soar - threatening to force trucking companies to raise their fees - railroads are more attractive as an economical way to long-haul goods to many markets. Of course, once in a location, trucks still have to be called on to get most goods to a final destination.

• As operating costs rise for trucking companies, manufacturers and wholesalers are looking for ways to trim their bottom-line transportation costs.

All of which mean that trains as a player in the market supply chain are growing in importance - and so is demand for people to manage the flow of freight.

"Every company is looking for better (profit) margins because that goes right to (the) bottom line. What we have are the rails of the country undergoing a renaissance," said Gary Sease, spokesman for CSX Transportation Inc. The Jacksonville, Fla.- based railroad unit of CSX Corp. employs 34,000 in 23 states and two Canadian provinces.

Transportation is a leading indicator of a growing economy and, with globalization occurring, products need to move from shore inland; and with fuel costs rising and a shortage of truck drivers, railroads are poised to provide the service.

Despite the pressures on trucking, that industry, too, continues to benefit from the nation's recovering economy and its volume of goods is rising as well, said Mike Gorman, a transportation expert and professor of management information systems, operations management and decision sciences at the University of Dayton.

But a federal hours-of-service law, which reduces the time a driver can drive from 12 to 10 hours, went into effect Jan.1; and that regulation has tended to curtail the movement of goods by trucks.

"Truck drivers are in short supply anyhow, so that further limits the supply. With the new rule, every truck trip takes a little longer and the law means that drivers are, well, busy resting instead of busy driving," Gorman said.

Sherry Marshall, executive dean of the Workforce Development Center at Cincinnati State University's Evendale campus, says the size of Cincinnati's Queensgate railyard puts the region in the crosshairs of the growth in demand.

CSX and Norfolk Southern Corp. are the major rail companies in the region, Marshall said.

"The rail industry is competitive pricing-wise, particularly for companies interested in consumer goods mobility. And Cincinnati is a crossroads," said Marshall, head of the program that trains seven to 16 people to become conductors in each five-week training session.

The training program was initiated at the request of CSX about nine years ago, said Don Seagraves, business manager of technical training services for the Workforce Development Center. The jobs that result are attractive in pay. "A reasonable expectation of the first year salary is about $36,000, but if you did a poll, that's probably a low-ball number," Seagraves said.

Railroads offered an average salary of $61,895 in 2003, according to the Association of American Railroads. Locomotive and freight car maintenance specialists earn an average of $48,853, while conductors earn an average of $67,128 and locomotive engineers earn an average of $75,162 and peaks at $110,000.

Josh Williams, 22, a McLoeansboro, Ill., resident, came to the southern Butler County training center of AMDG Inc., a private school that trains people to be railroad workers, about five weeks ago to learn to be a conductor.

"My grandfather worked on the railroad for 30 years. I've kind of lucked into this and decided it would be a real good career," said the former telecommunications major at Lincoln Trail, a junior college in Robinson, Ill. "They said within five years I could be promoted to engineer. And that's maybe a $50,000 job. You work extra, maybe it's $100,000."

After another week of training, he will travel to Cleveland and then to Evansville, Ind., where CSX has offered him an entry-level job.

AMDG, an Atlanta-based training company, sees great potential in the railroad industry, said president Lance Duncan. "We are graduating about 600 to 800 conductors a year," he said. "And we're placing about 96 percent of our students into jobs."

One of the region's biggest users of train transit for raw materials and finished products is the AK Steel plant in Middletown, where the company ships about 6 million tons of finished product a year from more than 6 million tons of raw material.

"Our goal is to go rail whenever we can," said Alan McCoy, vice president government and public relations, "although for out-going material, the breakdown is still 50-50: half by rail and half by truck. The biggest limiting factor is the customer's ability to take a rail shipment. Not all can."

And that's a fact that trucking companies know well. Experts point out that the last mile of transportation to stores, factories or companies will be done by trucks for the foreseeable future. And that's why shippers today prefer the intermodal concept, where freight is moved in containers that can easily be lifted and shipped on a ship, train or truck, depending upon how urgent the company needs the product and the cost.

Cincinnati figures to have a prominent place in the growing intermodal approach to moving freight and consumer goods because the Queensgate yards northwest of downtown consistently rank as a top-five hub for volume within the CSX system.

That hub connects east and west lines to north and south rail lines in the Midwest, handles 600 tons of freight and 80 trains daily and processes more than 640,000 individual freight cars annually.

"The Queensgate yard is a classification center, one of our most active," Sease said. A classification center is a high-tech switching yard where freight or products are shifted from train to train as raw material or goods are distributed across the nation. "It's like spokes off the hub of a bicycle wheel," Sease said.

And that localized activity feeds the demand for new workers here.

"We need to actively recruit people at all levels," Sease said.

The appeal of retirement for many career railroad workers is irresistible, said Dennis Schuler, a United Transportation Union official based in suburban Cleveland.

The retirement system, which is independent of Social Security, brings an average of $2,700 to $3,000 per month to workers who can retire at the age of 60.

"We are continually losing people," he said. "But the pay is good. People could make six figures a year if they're willing to work.

"But the overtime is mandatory and not many people like that."

One local retiree in 2002 was telegraph operator Frank Hiltibrand, 62, of Newport, who left CSX after 42 years on the job.

He pointed out that the industry may have trouble luring workers to its ranks because of the unusual hours that people will have to work. Like hospitals, safety services and trucking, work occurs on a 24/7 calendar.

"Off and on I'd get a day job and then maybe it would be back to nights," he said. "It was like that for 25 years. I got used to it, but I'm not sure you're going to find a lot career workers anymore willing to do that."


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