A legal rail strike has been averted, with President Joe Biden on Friday signing into law legislation that requires the unions and railroads to adopt the labor contract negotiated in September.
Had Congress not intervened, members of four unions could have gone on strike as early as Dec. 9, an action shippers maintained could cost the U.S. economy billions of dollars and hastened the country into a recession.
As expected, reactions to this week’s actions by Congress and Biden were mixed.
Unions were displeased over calls to mandate the September labor deal without an additional seven days of paid sick leave. Shippers were relieved that a potential strike was prevented, while the railroads hinted that questions about work-life balance could be addressed in future negotiations.
Congress vote shows who unions’ allies are
The four unions whose members had rejected ratification of the September labor agreement expressed frustration over congressional members who voted that the unions accept the deal without any additional requests for more paid sick leave.
These unions also expressed disappointment over similar calls from Biden early this week.
“This leaves me baffled, exasperated and deeply saddened,” said Tony Cardwell, national division president for the Brotherhood of Maintenance of Way Employes Division (BMWED), one of the four unions that rejected the September agreement, in a Thursday statement.
“… It is shocking and appalling that any member of Congress would cast a vote against any sort of provision that raises the standard of living for hard-working Americans. I am resolved to shine a light on their votes over this issue, because all railroad workers deserve to know and need to know who will stand and fight with them for what is right and just. They also deserve to know and need to know those who are willing to put them in harm’s way to save their own political and personal self-interests.”
Railroad Workers United, an interunion group whose members represent various operating crafts, also conveyed disappointment in the result.
“Politicians are happy to voice platitudes and heap praise upon us for our heroism throughout the pandemic, the essential nature of our work, the difficult and dangerous and demanding conditions of our jobs,” said RWU General Secretary Jason Doering. “Yet when the steel hits the rail, they back the powerful and wealthy Class I rail carriers every time.”
The transportation division of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART-TD) pledged to continue to take up the issue of sick leave and related work-life balance issues in future lobbying endeavors.
“Our efforts to improve the lives of our membership will continue during future [labor] negotiations, as well as in the regulatory and legislative process,” SMART-TD said in a statement Thursday. “The American rail worker has spoken, as have the American rail shippers. The national freight rail network is broken, and the need for long-term rail reform is clear. Labor and shippers are united on this front. More must be done to reverse the harmful effects of precision scheduled railroading and to right the ship for this nation’s economy and the hard-working members of SMART-TD.”
Actions provide certainty for shippers
Rail shippers said avoiding a rail strike provides them with the certainty that the supply chain needs to keep things moving efficiently and ultimately benefiting the U.S. economy.
“There was an industry-wide sigh of relief today after both congressional chambers voted in favor of implementing the September [tentative agreements],” said Corey Rosenbusch, president and CEO of The Fertilizer Institute. “Rail is critical to the movement of fertilizer year-round. Averting embargoes and production delays were crucial to not only ensuring we’re able to provide the fertilizers our nation’s farmers need but also avoiding additional disruptions to a global market already constrained by geopolitical events and volatile energy prices.
“Our members can now get back to doing what they do best — and that’s producing and shipping fertilizers to the farmers across the country that grow the food, fuel and fiber that we all need. [This] is a victory for food security, both in the U.S. and around the world.”
Chemicals are just one of the goods that could have been affected if a rail strike appeared imminent. The freight railroads are required to begin curtailing the movement of hazardous materials ahead of a work stoppage to ensure no trains are stranded. That curtailment could have begun this weekend.
Although shippers expressed relief that a strike was averted, some argue that Congress and federal regulators still must tackle outstanding concerns over rail service.
“This legislation puts one major problem to rest, but we’re certainly not out of the woods yet when it comes to fixing the breakdown of the freight rail network,” said Chris Jahn, president and CEO of the American Chemistry Council. “To get to the heart of the matter and prevent the next crisis, Congress and the Surface Transportation Board must address the root causes of rail service problems that continue to put the brakes on U.S. manufacturing.”
Labor concerns highlight rail’s essential role in freight network
Had the rail strike come to pass, it would have caused more volumes to move to trucks. But the trucking market can only handle so much of that normally handled by rail. So averting the work stoppage ultimately benefits other stakeholders within the supply chain.
“The trucking industry thanks Congress for acting swiftly to prevent what could have been a disastrous rail strike,” said Chris Spear, American Trucking Associations president and CEO. “Trains move critical goods like hazardous materials and fuel — including diesel, which is already in short supply in numerous parts of the country. Any disruption to these critical supply chains would have been catastrophic for the economy and our industry.
“Hospitals, businesses and ordinary Americans depend on freight rail and trucking for daily necessities, and the trucking industry has neither the equipment nor the manpower to replace a single day of lost freight rail service. Truck transportation and railroads are much more complements than substitutes. There is no way the trucking industry can replace all the rail freight. We appreciate Congress stepping up and ensuring that the nation’s wheels — be they steel or rubber — keep moving.”
Said Patty Long, president of the Railway Supply Institute (RSI), whose members represent rail-related equipment manufacturers: “RSI members manufacture and own more than 70% of the rolling stock traveling on the railroads today and provide critical products to Class I and shortline freight railroads, shippers, Amtrak and transit authorities nationwide. A rail strike would have exacerbated an already fragile supply chain at a time when the industry is already struggling with hyperinflation.”
Meanwhile, railroad groups said unions’ concerns could be addressed in future labor talks down the road.
The next round of negotiations for a new collective bargaining agreement between the unions and railroads begins in January 2025. Talks could also occur outside of that forum via the grievance and arbitration process, which was the recommendation of the Presidential Emergency Board, a three-person panel appointed by Biden to look into how to resolve the years-long contract dispute.
“We look forward to using these agreements as a springboard for further collaboration with our unions regarding opportunities to enhance rail careers, promote safety, support the environmentally friendly and efficient transport of freight, and strengthen our role as the backbone of the U.S. economy,” said the National Carriers’ Conference Committee, the group representing railroads at the bargaining table. “We have heard and recognize the deeply felt concerns regarding paid leave benefits and will work with rail union leaders in future bargaining rounds to assess the structure of these provisions.”
Ian Jefferies, president of the Association of American Railroads, noted that congressional votes to force the parties to adopt the September labor agreement received overwhelming bipartisan support.
Legislation compelling the parties not only to adopt the September deal but also require seven more paid leave days was voted more closely along party lines, with some exceptions.
“As we close out this long, challenging process, none of the parties achieved everything they advocated for,” Jefferies said. “The product of these agreements is a compromise by nature, but the result is one of substantial gains for rail employees. More broadly, all rail stakeholders and the economy … now have certainty about the path forward.”
“Let’s be clear: Railroading is tough, essential work that keeps our nation moving, and our employees deserve our gratitude for moving America’s freight and doing so safely every day. The gains in this agreement are significant, including historic wage increases, best-in-class health care and meaningful progress in creating more predictable, scheduled work shifts. Without a doubt, there is more to be done to further address our employees’ work-life balance concerns, but it is clear this agreement maintains rail’s place among the best jobs in our nation.”
Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.
Click here for more FreightWaves articles by Joanna Marsh.
For more coverage about the rail labor situation, go here.