Freight Rail Giants Face Mounting Pressure Over Precision Scheduled Railroading

The Surface Transportation Board is intensifying scrutiny of America's largest freight railroads as complaints mount over service disruptions linked to controversial operational changes implemented in recent years.

At issue is Precision Scheduled Railroading (PSR), a lean operating model that has swept through the industry, promising enhanced efficiency and profitability. Under PSR, railroads run longer, less frequent trains on fixed schedules while dramatically reducing locomotive and workforce numbers. Wall Street has cheered the approach—Union Pacific and CSX have posted record profit margins—but shippers, unions, and even some lawmakers are crying foul.

"We're seeing systematic deterioration in service reliability," said Martin Oberman, the STB's outgoing chairman, at a recent hearing. "When chemical plants can't get raw materials and auto manufacturers are idling production lines because railroads won't provide adequate service, that's a problem for the entire economy."

The controversy has united strange bedfellows. The American Chemistry Council and National Grain and Feed Association have joined railroad labor unions in condemning service cuts. They argue PSR prioritizes shareholder returns over customers and workers, with some Class I railroads reducing staff by over 30% since 2018.

Industry executives defend the model. "PSR isn't about cutting service—it's about eliminating waste and improving asset utilization," insisted one railroad CEO during congressional testimony last month.

But the political winds may be shifting. Transportation Secretary Pete Buttigieg has signaled support for stronger STB enforcement powers, while bipartisan legislation introduced in both chambers would mandate minimum service standards and strengthen shipper protections.

The rail industry generates $80 billion annually and moves 40% of America's freight.

As supply chain concerns dominate economic policy discussions, the balance between operational efficiency and service reliability has become a defining battle for the sector's future—with regulators, Congress, and the White House increasingly willing to intervene.