Volume woes at U.S. railroad operators are set to spill into next year as labor shortages continue to hurt the sector that is critical in connecting consumers with businesses and finished goods, according to analysts, Reuters reported. U.S. railroads have come under criticism from regulators and shippers for staffing cuts in pursuit of a leaner operating model that boosted profitability, but affected rail services. "While the labor environment does appear to be incrementally improving over the last several months, it will still take some time to see meaningful service improvement," Wells Fargo said. Railroad profits will be under further pressure from investments in service and U.S. union pay hikes through 2024, according to Susquehanna. The North America railroad industry has also been under scrutiny for working conditions. The Biden administration last month secured a tentative deal between railroads and unions to avert a railway strike that could have wreaked havoc on the U.S. economy.
