Wall Street’s Favorite Way to Run a Railroad Is Under Fire

Union Pacific Corp., CSX Corp. and other big U.S. railroads that slimmed down to please investors are now facing customers angered by poor service and workers worn out by a relentless drive for efficiency.

The conflict is expected to come to a head at a two-day hearing of the Surface Transportation Board, where shippers and rail employees will lay out their grievances. The in-person meeting begins Tuesday in Washington and will be streamed online.

Regulators have indicated they share shippers’ concerns and are seeking to address them. Martin Oberman, the Biden-appointed chairman of the STB, criticized large railroads ...