Class I railroads

Class I Railroads, 1928 to 1946. Beginning with 1928 and continuing through 1946, the number of reporting classes was increased from the 70 to 157 classes. For the 157 commodity classes, the following data were reported. 

Class I Railroads, 1947 to Present. Freight traffic during the years 1941 to 1945 reflected the effect of wartime production with its varying degrees of influence on certain particular commodities, as a result of which a revision of the commodity classification was again desirable. Effective with the January 1, 1947 revision, the number of commodity classes was increased again—this time from 157 to 262 classes. The data reported for each of the 262 classes are the same as shown for the period 1928 to 1946. Of the 105 new classes, some 17 additional classes are of interest to the chemical and allied products industry (Table III). 

Honary, L. Case study Approval of soybean oil-based rad curve grease by a U.S. Class I railroad. NLGI Spokesman. 2003, <57, 19—20. 

The overall safety performance of the railroad industry tends to be dominated by the performance of the largest railroads. Therefore, investigating the relative safety performance of the smaller railroads may shed further light on the relationship between economic deregulation and safety performance. In particular, some of the financial distress in the railroad industry was attributed to the requirement to continue service on improfitable lines. Once railroads could abandon these unprofitable lines, financial conditions improved and so did safety performance. However, abandonment of small lines resulted in a proliferation of small railroads that provided service on lines abandoned by the larger Class I railroads. Many of these smaller railroads are non-union and are able to operate at a profit because of lower labor costs (Savage, 1998). 

Class II railroads have 70% higher rates of trespasser fatalities (per billion train miles) and collisions (per million train miles) than Class I railroads, and about a 50% higher rate of derailments per million train miles (Savage, 1998, pg.ll9). 

Taken together, these facts suggest that the safety performance of the small new entrants may not be substantially worse than the performance that would have been experienced by Class I railroads had these railroads maintained short-haul operations. This supposition raises the question of why the smaller firms, with presumably lower financial resources, have been able to maintain a reasonable safety record. A part of the answer (Savage, 1998, pg. 119) is that the substantial reduction in employment by Class I... 

Golbe s analysis is based on annual safety statistics and annual financial performance for 1963 through 1967. The sample was restricted to Class I railroads, resulting in a sample of about 90 firms for 1963 and 1964 and about 70 firms for 1965 through 1967. Of die total sample, the... 

A safety official at a Class I railroad admitted that workers might feel pressure from management not to report injuries ... 

A senior safety executive at a Class I railroad that has undergone several mergers since deregulation initially seemed on guard when asked... 

A lot of [the workers we] hired on in 1980 were those with low seniority in the Class I railroads, so we now have a lot of guys who have 20-30 years of experience... As Class I railroads downsized, we were able to get relatively experienced workers. Now, in today s labor market, it s much more difficult. 

A Class I railroad manager whose railroad had imdergone major restructuring since deregulation emphasized the potential problems associated with mergers and acquisitions ... 

Yu Hsing and Franklin G. Mixon, Jr. (1995), The Impact of Deregulation on Labor Demand in Class-I Railroads, Journal of Labor Research, Vol. 16, pp. 1-8. 

Paula C. Morrow, Michael R. Crum, and Frank J. Dooley (1997), Employee Morale in the U.S. Class I Railroad Industry, yowr/ia/ ofTransportation Law, Logistics and Policy, Vol. 64, pp. 439-461. 

What can be said is that the financial position of the railroads has improved in recent years. Of course, this is in the context of poor financial returns and bankruptcies in the 1960s and 1970s. In 1996 the Class I railroads earned a 9.4 percent return on net investment compared with 4.6 percent in the mid-1980s (AAR, 1997). The question of whether the improved performance has come from an ability to exercise market power is hotly contested. 

Another source of published data is the annual FRA Accident / Incident Bulletin which provides individual information for the largest forty-four railroads. The data on collisions and derailments per million train miles in 1996 are shown in table 13.2. As can be seen, collision and derailment rates do vary markedly between the large. Class I, railroads. Shippers could draw some conclusions from these data, although they would have to build in allowances for differences in the nature of operation of individual railroads, such as the amount of switching, that affect accident rates. 

The safety record of the smaller railroads can be investigated using FRA data. Table 15.3 shows accident and fatality-rate data for the years 1994-96 for three different sizes of railroads the large Class I railroads, the medium-size Class II railroads, and the small Class III railroads who are defined as having less than 400,000 employee-hours per year. In rough terms. Class III would be equivalent to those railroads shown in table 15.1 as moving less than 40,000 carloads a year. 

The most notable difference is in the rate of collisions and derailments. The rate of collisions is similar to that of class II railroads, but twice that of the Class I railroads. Derailments occur almost four times as frequently as on Class I railroads and over twice as frequently as on Class II railroads. Of course part of the explanation is that the smaller railroads are engaged in switching operations, which is highly susceptible to collisions and derailments in comparison with line-haul operations. Another explanation is poor track condition, occasioned by years of low investment prior to the sale by the large railroads. Fortunately, the consequences are mitigated by low operating speeds. 

Xj 94 is the overall occurrence rate for that subsection of the industry to which railroad i belongs in 1994. For this purpose the industry was split into three segments Class I railroads. Class II freight railroads, and Class II conunuter railroads and Xj 91.93 is the overall occurrence rate for that subsection of the industry to which railroad i belongs in 1991-93. 

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