Imagine running a marathon with invisible chains constricting your legs—this is the current predicament of America's four major railroads. Union Pacific, CSX, Norfolk Southern and BNSF, the arteries of the nation's freight network, continue to stumble in their post-pandemic recovery, drawing intensified scrutiny from regulators and raising alarms across supply chains.
The Surface Transportation Board (STB) recently mandated these rail giants to continue submitting biweekly service recovery reports for an additional six months through May 6, 2023. This regulatory action reflects deep skepticism about whether the carriers can meet improvement targets by the original November 6 deadline and responds to shippers' persistent complaints about "significant service problems."
Regulatory Spotlight Intensifies
The STB's decision represents more than bureaucratic oversight—it's a calibrated response to systemic underperformance. Beyond extending reporting requirements, regulators now demand new service benchmarks and expanded performance metrics including origin-destination data. This enhanced transparency allows microscopic examination of operational shortcomings, effectively holding railroads' feet to the fire.
"The coming months will be critical for these four carriers to demonstrate resilience," the STB emphasized, particularly as agricultural harvests and holiday shipping seasons approach. The implication is clear: rail service deficiencies could ripple through grocery stores and gift boxes nationwide.
An Uphill Recovery
While carriers have made incremental progress since pandemic-era gridlock, STB data reveals none have restored 2019 service levels. Performance metrics—including terminal dwell times and crew availability—remain depressed, with labor shortages emerging as the primary bottleneck. Only Norfolk Southern has met its staffing targets for train and engine employees.
The discrepancies grow starker in individual cases. Union Pacific, the only carrier failing to exceed any pre-pandemic benchmarks, disputes the STB's methodology. While claiming to surpass its hiring goal of 1,200 transportation employees, regulators identified reporting inconsistencies that placed the company below target. Similar data discrepancies affected BNSF's labor reports, prompting demands for standardized submissions.
"We've made real progress improving network fluidity," Union Pacific stated in an email, maintaining its operational metrics have remained stable near peak levels since April. The company asserts it has actually hired 1,400 transportation employees—a claim currently under regulatory scrutiny.
Systemic Challenges
Five interlocking crises complicate recovery efforts:
1. Labor shortages: Pandemic-induced attrition created gaping holes in workforces that require time-consuming training to fill.
2. Infrastructure constraints: Aging rail networks with capacity pinch points demand capital-intensive upgrades that can't be implemented overnight.
3. Operational inefficiencies: Suboptimal scheduling systems prolong terminal dwell times and create avoidable congestion.
4. Demand volatility: Post-pandemic economic swings make accurate capacity planning extraordinarily difficult.
5. Climate disruptions: Increasing extreme weather events routinely disrupt service with flooding, heat restrictions and winter storms.
Supply Chain Fallout
The consequences cascade through the economy:
• Shipping delays force manufacturers to maintain bloated inventories
• Cost inflation pushes shippers toward pricier trucking alternatives
• Production disruptions occur when critical components arrive late
• Consumer frustration mounts as holiday deliveries lag and prices rise
These friction points collectively threaten to dampen economic growth precisely when stability is most needed.
Path Forward
Meaningful improvement requires coordinated action:
For railroads: Aggressive hiring with competitive wages, infrastructure investment, and operational modernization must become priorities rather than talking points.
For regulators: Balanced oversight that incentivizes innovation while preventing service deterioration will be crucial.
For shippers: Diversifying transportation options and collaborating with carriers on solutions can mitigate vulnerabilities.
The extended reporting period serves as both warning and opportunity—a chance for railroads to demonstrate their indispensable role in America's economic health, provided they can break free from the constraints currently slowing their progress.