Dearth of rail workers leads to cargo delays for retailers.

Retailers entering the busiest season of the year are dealing with shipment delays of up to two days--and the Southern California fires are only partially to blame.

For nearly a year now, Union Pacific Railroad Co. has been struggling to maintain adequate staffing to keep up with the rising container traffic coming from the ports of Los Angeles and Long Beach.

It's an uphill battle, thanks to a federal Railroad Retirement Board ruling that allowed railroad employees with 30 years of service to retire with full benefits two years earlier than the previous benchmark of age 62.

The ruling took effect at the beginning of 2002, but its impact on staffing levels is especially being felt now. At the beginning of the year, Omaha, Neb.-based Union Pacific underestimated the number of employees that would take advantage of early retirement and how much the economy would pick up.

That's created a problem at the ports, which rely on 20 outbound and 14 inbound Union Pacific trains, each with up to 125 cars double-decked with two containers each, to move through L.A. and Long Beach daily.

"It's never a good time for delays," said John Bromley, a Union Pacific spokesman. "But the end of the third quarter and into the fourth quarter are always the busiest times of the year."

The Alameda Corridor, which connects the ports to the rail yards east of downtown L.A., became gridlocked in mid-October when fires raged throughout Southern California--including the Inland Empire, where a lot of warehouses are located. Inside those containers were the last of the holiday-season goods.

"The big concern would be how is this delay is affecting the (end) of the Christmas season," said Robin Lanier, executive director of the Waterfront Coalition, a Washington-based retailers trade group. "All of the Friday-after-Thanksgiving merchandise is in the stores or well on its way."

Port traffic surges

In a reviving economy, both local ports saw rapid growth in container traffic this year, which fed into Union Pacific's staffing problems.

The Port of Los Angeles moved 671,107 20-foot equivalent units in October, a 42.5 percent hike from the year-ago period, while Long Beach moved 436,824 TEUs, up 45 percent.

The port complex will move more than $200 billion worth of cargo this year--37 percent of which is transported by Union Pacific and Burlington Northern & Santa Fe Railway Co., the port's other railroad operator.

Delays of up to four days have dwindled to one to two days since the fires were extinguished earlier this month, according to Al Fierstine, business development director at the L.A. port. "It's an inconvenience," he said. "But I don't see any major definitive impact in the (retail) industry."

Fort Worth, Texas-based Burlington Northern has not experienced the same problem with early retirements because it had already hired as many as 1,400 people before the fires broke out.

"We did have people who retired early but we prepared for that and had enough people hired to cover those vacancies," said Lena Kent, director of public affairs for BNSF.

Meanwhile, Union Pacific is looking to restock employee rolls.

The company has already hired 1,000 switchmen, brakemen and conductors in 2003 and plans to hire an additional 1,000 by the end of the year. In 2004, 2,000 to 3,000 additional positions will be filled, bringing the total payroll to about 51,000.

Union Pacific is also cutting the usual six-to eight-month hiring time for new employees in half to get more workers in the field quickly. The company has a 14-week training program for conductors, brakemen and switchmen.

A bigger problem is the locomotive engineer--the "driver" of the train--who requires six months of training after working at a lower position with the company. "There is a higher level of skill to operate the locomotives than the other jobs," said Bromley.

To halt some of the exodus, Union Pacific is offering cash incentives to employees who delay retirement while some management personnel have returned to the field.

While the new law has led to headaches, Union Pacific lobbied for its passage, along with the two unions representing railroad employees. "It meant some benefits for our employees and cost-efficiencies for us," Bromley said.