I get it for cost-cutting, but it’s clearly unsafe because of issues that have happened in the past because of PSR, like Power Shortages, Mass Liquidation of Locomotives, Longer Trains but Fewer Trains, and Higher Derailment Risk Factor.
It’s also being caused by the influence of investors, especially ones at Ancora Holdings LLC. They have been behind the PSR spectacle for almost every Class I Railroad in the US and Canada (Except for BNSF)
To my knowledge, BNSF is the Only Class I without PSR and is still being effective
but keep in mind that that report was invoked, at least in part, by letters such as this:
My opinions on what actually should constitute operationally-precision-scheduled railroading differ, in some places radically, from the expedience practiced under the PSR name by many railroads. That is of little to no concern here.
Maximizing profits. Seriously that is the actual point. The shareholders love it because reduced costs means more dividends. Oh yes Life is Good if you’re in the C Suite. Unfortunately, the people on the ground and in the dirt have valid concerns.
A big problem is safety concerns about reduced personnel and running longer trains out on the road and having to get more cars out of the yard and back out on the rails in a given shift which increases the risk of accidents due to having more work in less time. Obviously when that happens important details sometimes get overlooked and unfortunately that sometimes results in disasters that could have been prevented had people like safety inspectors had time to do their jobs right.
Another concern is not having enough equipment on hand to ensure reliable service. Railroad traffic has ebbs and flows to it and as a result cars and yards devoted to handling something like out of season commodities are gonna be sitting idle for at least some of the year. Not as many trains moving also means not as many locos are needed. Not as many locos being busy means they don’t need as much maintenance and repair so the shops that handle them aren’t as busy. Empty cars and yards, idle locos, and not busy shops are bad for the operating ratio. Shareholders don’t like that so they decide to sell off locos, facilities, and cars that ain’t busy at the moment. The problem is what do you do when you now need all that equipment and all those facilities you got rid of?
And last but certainly not least people whose livelihood is threatened by workforce reductions. It’s not that easy to just go get another job elsewhere when another shop, another yard, or a whole other railroad are also firing and laying people off.
So yeah, PSR is great if you’re a shareholder who is living like a hog in the fat house off of dividends. If you’re one of the people counting on the railroad to make a living, not so much.
PSR is something that thinks it knows the price of everything and is trimming costs.
The reality is PSR knows the value of nothing and is making rail customers seeking other means to transport and distribute their products.
In 50+ years of railroading each time management changed - they changed some aspect of the operation, Most commonly closing terminals ‘P’ ‘S’ and ‘R’. The next change in management would reopen the previously closed terminals. Each management would claim savings into the millions for the closing and then the reopening. However, the closing would leave the terminal in existence, just without crews and support personnel and motive power.
PSR closing terminals ripped up tracks and sold the materials for scrap value, laid off the employees, sold off the power as excess - thus making it much, much harder to bring the property back to being a service oriented business undertaking.
BNSF certainly does practice PSR. Each class one have gone through the stages of PSR. Some have eased up on some of the practices to varying extents.
Some practices of PSR have been things railroads always have done. PSR took them to the extreme. Trying to run a “balanced” system so that the extact number of assets, human and equipment, etc., would be nearly the same everyday. Excess assets would then be retired or stored. This leaves no elasticity in case of any unforseen condition that might happen, let alone any new business that might develop. Some railroads made changes that required the customers to change their operations to fit the railroads operations. Instead of getting switched every day, they get switched every two or three days. If a customer didn’t have capacity to hold extra cars between service days, they either have to add such capacity, pay detention rates to the railroad, or switch to trucks where possible.
One of the tenants of PSR calls for a pivot to growth once the railroad is “right-sized.” But meaningful growth is problematic. There are no easily available assets to accommodate any meaningful growth. Some that have eased off PSR somewhat have found they have to pay more now to undo the cuts done under PSR to actually have growth, and they know they need to add business because eventually there’s nothing left to cut. There’s only so many pennies that can be squeezed out of each dollar.
I sometimes think they want RR work to go from variable (depending on the needs of the customer) - to systematic, like a guy on an assembly line that puts the head of the doll on the bodies.
The obsession is with Operating Ratio and stock price. Numbers that don’t tell the whole story about a railroad, but are easy numbers to bandy about to the short term, quick return type of investor groups.