LABOR PRODUCTIVITY IN RAIL TRANSPORT

Labor productivity is among the central economic issues in the railroad industry. Labor negotiations and federal price-control programs are examples of activities that have involved productivity considerations. Currently, the Interstate Commerce Commission is considering productivity adjustments in the rail cost recovery procedures that were mandated by the Staggers Rail Act of 1980. Historically, productivity has been measured as labor content per ton-mile. Such measures, however, typically have produced productivity gains that appear to be unreasonably large. This may be caused by the changing nature of the ton-mile itself as the railroads increasingly embrace new operating practices such as unit trains, larger freight cars, and so on. An allocation of rail labor inputs among several output measures, including train miles, car miles, and carloads, is proposed. It is shown that rail productivity gains have been modest, at best, and that there has been considerable variation in productivity gains among the major carriers.