Five of 13 rail unions have now reached tentative agreements with Class 1 railroads on a new contract that calls for 24% pay raises, back pay, and cash bonuses retroactive to Jan. 1, 2020 (GM Sept. 2, p. 1; Aug. 19, p. 28).
The remaining unions, which represent roughly 85,000 rail workers, remain at loggerheads with the railroads, however, and a strike or lockout could take place as early as Sept. 16, the end of the latest 30-day “cooling off” period. The unions and the railroads have been trying to reach a contract for more than two years.
The Association of American Railroads (AAR) estimates that a national rail shutdown would cost the US economy at least $2 billion a day. In an effort to head off a strike, US Labor Secretary Marty Walsh attended a special mediation session hosted on Sept. 7 by the National Mediation Board (NMB). Although Walsh’s comments were not made public, media reports said he warned both parties that a strike would imperil the nation’s fragile economy and exacerbate supply chain disruptions.
Federal law gives Congress the power to block or delay a railroad strike, allowing lawmakers to appoint arbitrators to fast-track a new contract or force the parties to abide by the recommendations made in August by the Presidential Emergency Board (PEB). The PEB, which was appointed by President Biden in July (GM July 15, p. 1), proposed a 22% wage increase, along with $5,000 in service recognition bonus payments, over the five-year life of the contract, retroactive to Jan. 1, 2020.
The Fertilizer Institute (TFI) on Sept. 7 sent a letter to Congressional leaders urging action to prevent a Sept. 16 shutdown of freight rail operations in the US and to begin preparations to implement the PEB recommendations.
“A disruption to freight rail operations would be catastrophic,” said TFI President and CEO Corey Rosenbusch in a Sept. 8 statement. “Over half of all fertilizer moves by rail year-round throughout the United States, and the timeliness and reliability of fertilizer shipments is absolutely critical. If farmers do not receive fertilizer, it results in lower crop yields, higher food prices, and more inflation for consumers.”
NMB-guided mediation was scheduled to continue on Sept. 8-9. The National Carriers’ Conference Committee (NCCC), which represents most Class I freight railroads in national collective bargaining, said on Sept. 8 that it is unwilling at present to extend the cooling-off period beyond Sept. 16. According to Railway Age, the NCCC said “extending the cooling off period would only inject additional uncertainty into the bargaining process.”
“A speedy resolution is paramount,” said TFI’s Rosenbusch. “With less than two weeks to go, carriers and shippers have already begun contingency planning, and if no agreement is reached soon rail shipments will have to wind down days before Sept. 16 to allow carriers to carefully clear their networks. Fertilizer shippers and their farmer customers want carriers and their unions to reach a compromise, and if necessary, Congress needs to act to prevent a devastating halt to our nation’s supply chain.”