As of December 2019, Norfolk Southern has laid off 3,500 employees to reduce costs. Experts hypothesize that this is an outcome of the current trade war. This is because the trade war has decreased the need for freight railroads as it has negatively impacted agriculture and manufacturing.

According to the U.S. Bureau of Labor Statistics, there has been a decrease in rail jobs over the course of 2019. In the past year, over 20,000 railroad workers have lost their jobs. Since the U.S. Bureau of Labor Statistics began recording the number of employees in the railroad industry in 1940, it has never fallen below 200,000 employees.

Railroad Industry Introduces New Technology

Analysts suspect that a possible reason for these lost jobs is a result of the technology that the rail industry is beginning to implement. The industry has also been using Precision Scheduled Railroading (PSR), which is a new ability to direct rail traffic. These advancements are allowing the railroad industry to cut down on jobs to stay profitable since it is doing the work that those workers usually do.

Another reason that makes the PSR appealing is the fact that it reduces delays. The PSR ensures that trains are adhering to a fixed schedule because it minimizes trains from stopping. Stoppage is reduced because the same train and workers are being used for a longer period of time. Additionally, railroad executives are using drones and artificial intelligence to observe tracks and alert customers about train locations. Since 2017, PSR has been a strategy for executives to increase profits, in turn making up for what was lost due to the downsizing of coal traffic.

Hope for the Future

Rail industry lawyers are optimistic that freight carloads will increase once President Trump finalizes trade deals with China, Mexico, and Canada. However, despite these new relations, most of the conductor and maintenance jobs with a salary of $70,000 a year are not likely to return.

These decisions made by railroad executives to implement new technology and reduce jobs are being praised by Wall Street. Many major railroad companies have increased their stocks. Kansas City Southern rose more than 60 percent, and Norfolk Southern and Union Pacific stocks grew by 30 percent. Our team at Doran & Murphy will keep you posted on any major technological advancements or how employment numbers shift in 2020.