America's Railroads Assist With Economic Recovery

One of the nation's oldest modes of goods movement, and a pillar of the national economy for nearly 150 years, is now providing much needed employment and investment to spur economic recovery. According to the Association of American Railroads (AAR), the nation's seven major railroad companies are hoping to hire a combined 15,000 people in 2012. AAR represents the nation's major freight haulers and Amtrak. Norfolk Southern, the Pennsylvania's largest freight rail hauler, intends to hire 2,800 people this year. CSX, the state's second largest freight railroad, hired 4,000 people last year and intends to hire more than 3,000 this year. Short-line and regional railroads are expected to hire thousands more.

Railroad employment is on pace to rise for the second year in a row. It averaged about 232,000 through the first 3 months of 2012, and 229,000 employees for all of 2011, up from 216,525 in 2010 according to the Bureau of Labor Statistics. It would be just the 12th time since 1947 that average annual railroad employment increased, and just the fourth time that railroads posted two or more years in a row of increased employment. Of the new hires at major railroads, about 3,000 are planned because of growth, while the remaining 12,000 are because of attrition, including a wave of retirements that is expected to continue and open up tens of thousands of jobs in the years to come.

Beyond the employment opportunities offered at these railroad firms over the next year, their collective investment in rail infrastructure within Pennsylvania will spur additional job creation. Railroads plan to spend a record $13 billion of their money on system improvements, says AAR. According to the Pennsylvania Intercity Passenger and Freight Rail Plan, the Commonwealth's railroads plan to invest $376.6 million in their infrastructure over the next three years. Noel Perry, Managing Director and Senior Consultant at Freight Transportation Research Associates, notes that rail freight haulers have improved service and profit margins over the past decade, allowing them to put more money toward infrastructure improvement and training new employees. "As the economy grows," Perry says, "most railroad will be able to grow along with it."

The Marcellus Shale has created an emerging railroad market in Pennsylvania, which boasts 55 railroads, more than any other state according to the Keystone State Association of Railroads. Joe Gerdes, Executive Director of the Keystone State Railroad Association, believes that the Marcellus Shale has been a "godsend" particularly to short-line railroads. Wellsboro and Corning Railroad, for example, which operates a 35-mile between Tioga County, PA and Steuben County, NY hauled roughly 300 carloads of scrap metal a year before the Marcellus Shale industry took off. It now moves thousands of carloads of sand and water from drilling sites, according to Gerdes.

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