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September 9, 2022 4:48 PM, EDT

Pressure Mounting to Settle Railroads’ Labor Dispute

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With a Sept. 16 deadline looming, pressure is mounting on the nation’s major freight railroads and the unions to reach an agreement and avoid a potentially crippling strike or lockout.

Such a disruption would deeply affect supply chain as retailers gear up for the holiday shopping season.



American Trucking Associations on Sept. 9 sent a letter to congressional leaders urging them to intervene in the labor dispute, as Congress is allowed to do if no agreement is reached in the coming days. 

Chris Spear

Spear

“Idling all 7,000 long-distance daily freight trains in the U.S. would require more than 460,000 additional longhaul trucks every day, which is not possible based on equipment availability and an existing shortage of 80,000 drivers,” ATA President Chris Spear said in the letter. “As such, any rail service disruption will create havoc in the supply chain and fuel inflationary pressures across the board.”

Under the Federal Railway Labor Act, if the unions and management cannot find common ground, Congress will have the option of mandating that railroad employees return to work. 

ATA’s letter is urging Congress to help the sides implement a long-term contract patterned on the recommendations outlined by the Presidential Emergency Board. However, it cautions against merely extending the negotiation timeline, which Spear said would push a potential strike deeper into the holiday season when the supply chain already is under pressure.

“Merely delaying a possible strike through congressional action will simply exacerbate the concerns of consumers and industry,” Spear said. “A possible strike or lockout in October or November is arguably worse than one next week — although any disruption will cost the nation billions of dollars of lost productivity.”

The PEB was established last month by President Joe Biden. Under the law, that panel had 30 days to make contract recommendations to settle the dispute. 

On Sept. 16, when the so-called cooling-off period expires, the unionized workers will have the option of walking off the job and management will have the option of locking them out.

An estimated 150,000 workers with 13 unions representing U.S. railroad workers have spent years renegotiating their contracts with carriers represented by the National Carriers’ Conference Committee.

The PEB has issued its recommendations to settle the dispute, including pay increases of 24%, over the life of the deal. The board also is proposing $5,000 bonuses to the workers. 
Tentative agreements have been publicly announced with five unions, and the status of the other talks is unclear.

Meanwhile, the American Association of Railroads, which represents the industry, estimates a labor dispute could prove extremely costly. 

AAR said a labor stoppage would cost the U.S. economy more than $2 billion a day and disrupt deliveries of goods and passenger traffic. AAR’s report came out one day after Labor Secretary Marty Walsh took part in the negotiations.

The group said a strike would idle some 7,000 freight trains a day run by CSX, Union Pacific, BNSF, Norfolk Southern, Kansas City Southern and other railroads, and disrupt passenger operations because Amtrak and half of all commuter rail systems rely at least partly on tracks owned by the freight railroads.

In a Labor Day statement, union leaders indicated they were taking a hard line in negotiations and blamed management for not reaching an agreement. 

“It has become clear in our post-Presidential Emergency Board negotiations with the rail carriers that they are counting on the federal government to come to their aid if we are unable to reach a tentative agreement, and so far, we have not reached an agreement,” Sheet Metal, Air, Rail and Transportation Union President Jeremy Ferguson and Brotherhood of Locomotive Engineers and Trainmen President Dennis Pierce said. “The same rail carriers that complain about government intervention when the Federal Railroad Administration proposes a rulemaking on crew size, and also shudder at the thought of the Surface Transportation Board issuing regulations that would help shippers, now all but hide behind Congress, refusing so far to negotiate terms our members would accept and ratify. 

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“While there are no guarantees for either side as to what Congress might do if they are involved, there is no doubt that the rail carriers expect Congress to intervene to save them from dealing fairly with their employees if there is a job action; Union Pacific CEO Lance Fritz so much as publicly said that earlier in the week.”

The unions also have expressed concern about attendance policies, paid leave and expenses to arbitration or to negotiate separately with the railroads. Unions said their workloads have become unbearable after railroads eliminated nearly one-third of their workforces over the past six years.

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