In terms of monitoring Class I network health, the first two numbers we look at every week are the daily number of trains failing to depart on time due to a shortage of crews (trains holding for crews) or locomotives (trains holding for power).
They’re great metrics because, rather than look at the supply of crews and locomotives and try to guess whether they’re sufficient for current demand, these metrics quantify the initial consequences of a demand/ supply imbalance (not having enough). As such, they’re basically risk meters that move in real time, and they’ve been moving a lot lower recently.
Three weeks ago, we talked about a “beautiful absence of emergencies,” and this recent period of relative normalcy has allowed the railroads to drive down departure delays due to shortages of crews and power. In the chart below, we’ve consolidated these two metrics across the four U.S. Class I railroads. In the week ending Aug. 29, trains holding for crews came in at 12.1 and trains holding for power at 7.8, totaling 19.9. When was the last time we saw a reading below 20?
In the eight years since this data has been reported, there have only been five other weeks below 20, which was between March 28 and May 1, 2020 (circled in chart). What was happening at that time? The COVID lockdowns, temporarily cratering demand relative to the supply of crews and power (crew shortages came back to bite them five months later via a historically low furlough recall rate).
Here are the same totals for crews and power, but broken out by individual railroads since the beginning of 2023, as they bounced back from the 2022 Service Crisis. We’ve seen improvements across the board, with BNSF the biggest contributor in recent times, with significant drops starting in April of this year.
Takeaways
It’s all good news, because with these departure delays sitting around historic lows, it means operational risk is low, the national rail network’s ability to take a punch from a major hurricane or other natural disaster is high, and crew and locomotive resources are adequate relative to current train starts, containing labor expense and locomotive capex. If the railroads keep improving, we’ll be forced to retire this report because we’ll have nothing to write about. Would they miss us?
