THE POTATO RUSH GOES ON FOREVER.

There will be no general strike of railroaders tomorrow.  High-stakes jawboning led to an agreement, postponing any strike until October, and the best-case outcome will be the contracts ratified with no strike.  "It means there will be no nationwide rail work stoppage beginning Friday, Sept. 16, or for the next few weeks, but the threat of a management lockout or labor strike is not over as memberships of only two of the 12 unions have so far ratified tentative agreements."  There's still conflict, and we might again be on strike watch as the month ends.

Significantly, the threat of a work stoppage is not over, as tentative agreements face ratification votes by rail union members whose mood over the past 33 months of collective bargaining between their leaders and the NCCC has been super sour.

One union’s members already have rejected a tentative agreement—the International Association of Machinists and Aerospace Workers, representing some 5% of the unionized work force affected by this round of collective bargaining over wages, benefits and work rules. The negotiating team of the Brotherhood of Railroad Signalmen had earlier reached a tentative agreement, but a larger governing body of the union declined to authorize it being sent to the membership for a ratification vote. The sweeteners achieved by the signalmen, along with the BLET and SMART-TD, are expected to permit it now to enter the ratification process.

As the unions with tentative agreements proceed to encourage member ratification, a status quo of no strikes and no lockout will occur. What happens if some unions fail to ratify remains to be seen. There will be no bar against their engaging in a work stoppage at that time—or for the railroads to impose a work stoppage lockout.

The fraught labor relations in railroading have been a long time coming.  Once upon a time, there were hectic cycles in railroading: summer movements of ore from the Iron Range to the Lakes; the harvest rush from the Great Plains to the elevators, and then from the elevators to the flour mills or to the sea for export; the Aroostook potato rush.  There were itinerant railroaders, called "boomers," who would follow the seasonal rushes and make their living seeing the country.  During the seasonal rushes, the extra boards would turn over rapidly, with crews called "on their rest," meaning that they'd be back on duty eight hours after going off their previous run, which could last as long as sixteen (later fourteen, now twelve) hours.  The stress on crews and equipment, whether brought on by weather, deferred maintenance, or people with incompatible personalities working together, made for a gritty sort of railroad writing.

These days, though, it's all potato rush, all the time.

Over the years, I've been skeptical of efforts to make businesses in general, and railroads in particular, better by shrinking the physical plant and antagonizing shippers.  The latest effort sails under the banner of "precision scheduled railroading," but, trackside, it strikes Jeff Lusanne as just another speed-up.

It might be that even some of the managers complicit in the Permanent Potato Rush are having second thoughts about some of it.

Fifteen years ago, a Class I faced increasing demand cascading on top of an already congested system. Customers insisted on more cars, more pick-ups. Instead of first clearing and rebalancing the system and achieving fluidity before adding more equipment, the ops executives acquiesced to the salespeople and threw more cars, equipment and “best efforts” service promises into the system.

Dwell, speed, on-time origination and arrival times, train starts, cars on line and every other metric deteriorated further. The service numbers became known as “The Good, The Bad and the Ugly.” A few customers received ok service most of the time, the rest was catch-as-catch-can. Finally, as congestion worsened, railroad management came up with the idea that every customer, salesperson and network ops controller was to be given an iPad so everyone could simultaneously see the location of the customer’s car(s). Customers loved it. J.D. Power’s customer satisfaction ratings soared to 9.0. Congestion hit new highs. But customers psychologically knew where their car was. What a relief! As long as that car was picked up, it became the railroad’s problem, not the customer’s. The car inched its way toward its destination, but apparently that was now okay.

Finally, a serious recession occurred. The congestion problem was solved! Thank God for economic crises!

But you can always have a congested railroad, if you trim enough (that is, until you've effectively liquidated the railroad.) "All this conveniently bring us to the most valuable capital resource in achieving good service: Labor. Think about it: How would you like to work under conditions where you didn’t know when you go to work, when you get off, and have to spend 12-14 hours getting rest at the away-from-home hotel room?"  It's been more like eight hours, and that's the outer bound: all the checking in, washing up, talking to the family, comes out of that "rest" time.  No surprise that the crews are cranky.  Wall Street, meanwhile, might not be as understanding as these men think.

When you encounter today’s problems of congestion and pinch points, look first for an operating solution. If it becomes obvious you need to make a capital investment to extend a siding, add a crossover or rebuild yard receiving and departure tracks, then make it. Alternatively, you may find that adding a job at a location that moves cars faster, reduces dwell time, car-hire and congestion will actually saves you money. If it costs money, spend it. It may well reduce assets needed or be a one-time expense or capex.

Wall Street will understand spending money to restore operational integrity and enhance growth and pricing. (Wall Street will understand saving money, for sure!) Your workers can go back to doing their jobs. And customers will have a system that works.

I'll believe it when I see it.

I've long been suspicious of the latest attempt to "improve rail service" by offering less of it.  "[P]erhaps precision scheduled railroading is hype.  I fear that it's dressing up the false economy that downsizing or right-sizing or re-engineering or whatever you call it these days with a more positive sounding name."  The core concept of precision scheduled railroading is simple enough.  "A parked freight car is not making money for the railroad or moving goods for the shipper."  But it's possible to have fewer freight cars clogging the yards if there are fewer freight cars on the railroad.  "If those cars don't show up as promised, the shipper well might go to trucks."  I've long called attention to the folly of focusing on short-term returns to the detriment of the long-term health of the company, and that's particularly salient when you're dealing with a railroad running locomotives good for twenty years, freight cars good for forty, viaducts good for over a century, and tunnels that might be there forever.

Although the negotiators have their agreement, the membership still votes.

Early reactions suggest that some union members are furious with the newly released agreement and plan to oppose its ratification. The Washington Post's Lauren Kaori Gurley observed that responses from rail workers have been a mixture of "optimism and deep skepticism."

One unnamed rail worker bluntly told Jonah Furman of Labor Notes that "it's a garbage deal."

"Everyone hates it so far," the worker added. "It does nothing for me. I'll vote no. This has been a complete waste of time."

If those sentiments are common, late September might be interesting.  The machinists' reservations, note, do not involve the attendance requirements and subject-to-call provisions the operating crews have been seeking to change.

My Chicago Boyz colleague David Foster marshalled additional links on the freight railroads.