In this file:
· Railroads’ Strategy Thrilled Wall Street, but Not Customers and Workers
· Port Labor Talks Stall as Worker Disruptions Grow
Railroads’ Strategy Thrilled Wall Street, but Not Customers and Workers
September 20, 2022
In recent years, some of the biggest names on Wall Street have made significant investments in railroads, reaping big stock gains as railroads reported higher profits. But the underlying strategies that strengthened railroads’ bottom lines have caused friction with customers, regulators and particularly workers — giving rise to a contract dispute that threatened a nationwide shutdown of the railway system.
After losing ground to trucking in the mid-20th century, the rail industry managed to recover through decades of consolidation and a push for efficiency. The New York Times reports that critics say those same dynamics created a system with thin staffing and minimal competition, making it particularly vulnerable to shocks like the COVID-19 pandemic.
The strategy is evident in head count, which has fallen at nearly all of the major railway companies in the United States and Canada. At CSX, for example, the number of employees plunged by a third over the past decade. This helped expand the company’s profit margins, and its stock is up over 300% since the end of 2011, far exceeding gains in the wider stock market.
Last year, the seven major railways based in the United States and Canada — which include CSX — had combined net income of $27 billion, up from $15 billion a decade earlier. Over the past decade, the six of those seven railways that were publicly traded paid out $146 billion in stock buybacks and dividends, which is over $30 billion more cash than they invested in their businesses...
Port Labor Talks Stall as Worker Disruptions Grow
September 20, 2022
Hopes for an early resolution to contract talks underway at U.S. West Coast ports look to be slipping away. The Wall Street Journal reports that shipping industry officials say the negotiations between dockworkers and employers are at a virtual standstill, with the sides locked down by local concerns and unable to move to contentious wage and automation issues.
That suggests the bargaining that some had hoped would be done by early fall may push toward the end of the year and perhaps even into 2023.
U.S. importers and exporters are wary of such drawn-out negotiations because they fear the chances of new disruptions would rise in supply chains that have already been knocked sideways for more than two years...