Employment levels at the U.S. operations of the Class I railroads in April were up slightly from March but down 7% year-over-year, according to data submitted to the Surface Transportation Board.
U.S. Class I railroads operating in the U.S. employed 115,485 employees in April, up 0.42% from March but down 7.19% from April 2020. On a year-to-date basis, April’s headcount total is the highest among the first four months of 2021.
Rising headcount levels on a sequential basis in 2021 reflect efforts by the Class I railroads to add more employees amid growing rail volumes.
Indeed, headcount levels within the volume-sensitive train and engine employee category was 46,951 in April, up 1.18% from March.
Executives at Class I railroads noted during their companies’ first-quarter 2021 earnings calls and at recent investor conferences that they are hiring in targeted areas to ensure they have enough crews to meet demand.
However, the year-over-year headcount declines among all six employment categories reflect the Class I railroads’ efforts to deploy precision scheduled railroading, an operating model that seeks to streamline operations and cut costs.
“Our guidance in terms of volume in 2021 is high-single-digit volume growth. … We would expect headcount to be more low- to maybe mid-single-digit headcount growth — so certainly not one-to-one,” said Canadian Pacific (NYSE: CP) Chief Marketing Officer John Brooks at a May 19 investor conference sponsored by RBC.
“The critical piece there though is … timing [hiring] in measured steps, in which you bring those individuals on to be able to handle the business. And so it’s not only about doing more with less but it’s also about making sure that we’re bringing on those individuals in the right locations at the right time so we can ultimately deliver for our customers,” Brooks said.
Headcount for the train and engine category was down 3.51% year-over-year despite higher volumes in April 2021 than April 2020.
Meanwhile. the category for maintenance of equipment and stores was down 17.57% year-over-year in April to 17,895. Indeed, April’s figure is the lowest total for that category since January 2013, which is the earliest date that FreightWaves has data available.
Between March and April, headcount for employees responsible for the maintenance of equipment and stores was down 0.7%.