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How precision-scheduled railroading played a role in the Ohio train derailment

MARY LOUISE KELLY, HOST:

It's one of the biggest trends to shape the railroad industry in more than a century - precision scheduled railroading, or PSR. It's a business model that's propelled railroad companies to record-breaking profits, but some rail workers say PSR has made accidents like last month's derailment in East Palestine, Ohio, more likely. Adrian Ma and Darian Woods from our daily economics podcast The Indicator explain.

ADRIAN MA, BYLINE: For decades, the business of freight rail operated like this - the railroad companies brought in their trains, and the customers loaded them up with their corn or their coal or chemicals or whatever. And when that was done, the trains hauled the stuff away. And in this way, railroads were sort of like big taxis, right? Customers dictated the schedule.

DARIAN WOODS, BYLINE: Then in the 1990s came a railroad executive by the name of Hunter Harrison. He pioneered this new approach to the business - precision scheduled railroading, or PSR. It was all about cutting costs and making things more efficient.

MA: Under his system, freight trains became less like taxis and more like commercial airliners. Now railroad companies, not their customers, would dictate the schedule, and if the customers missed their departure time, tough noogies.

WOODS: Another aspect of PSR was doing more with less. It was reducing the number of employees and trains while making the remaining trains longer and loading them up with more cargo. Fewer employees, fewer trains, more cargo - that meant bigger profits. But we also wanted to know what the change felt like for the workers, so we called up Eddie Hall, who was a train engineer for about 25 years.

MA: Eddie, by the way, is head of a union called the Brotherhood of Locomotive Engineers and Trainmen, and he says it used to be that a typical train with its cars and its engines all lined up maybe was a mile and a half long and weighed about 6,000 tons.

EDDIE HALL: Where, nowadays, a train is closer to three miles long and the tonnage is over 20,000 tons.

WOODS: He says the longer trains tend to run into more mechanical problems.

MA: One more thing that's happened with PSR is that it's put more pressure on employees to keep the trains moving. Eddie says the terminal managers, who direct traffic in and out of the rail yards, they're now judged by various metrics like dwell time, which is basically how quickly can they take incoming cars and get them back on the rails.

WOODS: In short, Eddie believes PSR has made railroads less safe.

IAN JEFFERIES: Well, I can tell you that the data don't bear that out.

WOODS: That's Ian Jefferies. He's the president of the Association of American Railroads, an industry group, and the data he's talking about comes from an industry regulator, the Federal Railroad Administration.

JEFFERIES: Just take a look at 2022, for example. When it comes to Class I railroads, we had the lowest all-time accident rate across our main lines in our history.

MA: If you look at the accident rates for major railroads on those main lines, it went down about 9% during the years when precision railroading was really taking off in the U.S., but if you factor in the accidents that happen off the main lines during the same period, the industry's accident rate actually increased 20%.

WOODS: OK, hard to make too many conclusions from this.

MA: Exactly, right? These numbers do not tell a clear story on PSR. And either way, the industry may get some extra help from Congress on rail safety, whether they want it or not. Adrian Ma.

WOODS: Darian Woods, NPR News. Transcript provided by NPR, Copyright NPR.

Adrian Ma
Adrian Ma covers work, money and other "business-ish" for NPR's daily economics podcast The Indicator from Planet Money.
Darian Woods is a reporter and producer for The Indicator from Planet Money. He blends economics, journalism, and an ear for audio to tell stories that explain the global economy. He's reported on the time the world got together and solved a climate crisis, vaccine intellectual property explained through cake baking, and how Kit Kat bars reveal hidden economic forces.