OMAHA, Neb. — Freight railroads and their unions are facing increasing pressure from business groups and the White House to settle their contract dispute before Friday’s looming strike deadline.
The pressure stems from concerns that halting railroad deliveries of raw materials and finished products that so many companies rely on would be, in the words of the head of the U.S. Chamber of Commerce, an “economic disaster.”
The American Trucking Associations (ATA) is among the groups calling on Congress to help resolve ongoing labor negotiations. The trucking industry is freight rail’s largest customer, and in a letter sent to Capitol Hill on Sept. 9, ATA is warning of dire consequences for the U.S. supply chain if a strike were to go into effect.
“Idling all 7,000 long distance daily freight trains in the U.S. would require more than 460,000 additional long-haul trucks every day, which is not possible based on equipment availability and an existing shortage of 80,000 drivers,” ATA President and CEO 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.”
The letter urges Congress to help implement a contract patterned on the recommendations outlined by the Presidential Emergency Board and cautions against merely extending the negotiation timeline further, which would push a potential strike deeper into the holiday season when the supply chain is already under added pressure.
“Merely delaying a possible strike through congressional action will simply exacerbate the concerns of consumers and industry. 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,” Spear said.
A White House official said President Joe Biden and members of his cabinet were in touch with the unions and railroads Monday as part of their efforts to avert a strike. And for the second time in the past week, Labor Secretary Marty Walsh sat down at the negotiating table Sunday to urge the parties to reach a deal. Walsh postponed a planned to trip to Ireland this week to remain close to the talks.
A Labor Department spokesperson said Monday that it’s crucial that the parties remain at the negotiating table and come to an agreement because “a shutdown of our freight rail system is an unacceptable outcome for our economy and the American people.”
Suzanne Clark, the head of the U.S. Chamber of Commerce, said Monday that “a national rail strike would be an economic disaster — freezing the flow of goods, emptying shelves, shuttering workplaces and raising prices for families and businesses alike.”
The chamber joined a number of other business groups, including a coalition of 31 agricultural shipping trade groups, in sending letters to Congress urging lawmakers to be prepared to step in and block a strike if the two sides can’t reach an agreement by the end of the week. The chamber said if it comes to that, Congress should impose the terms recommended by a Presidential Emergency Board that Biden appointed this summer.
The Association of American Railroads trade group put out a report last week estimating that shutting down the railroads would cost the economy $2 billion a day.
The coalition negotiating on behalf of the nation’s biggest freight railroads — including Union Pacific, CSX, Norfolk Southern, BNSF and Kansas City Southern — has announced eight of the 13 tentative agreements needed to avert a strike by some 115,000 rail workers.
The deals that have been announced so far have closely followed the Presidential Emergency Board’s recommendations that called for 24% raises over five years, $5,000 in bonuses and one additional paid leave day a year. But the two biggest unions representing conductors and engineers have been holding out because they want the railroads to go beyond those recommendations and address some of their concerns about strict attendance policies and working conditions.
The railroads have said they would begin curtailing shipments of hazardous materials and some other goods Monday in advance of a possible work stoppage at the end of the week. That would ensure that containers of those dangerous goods aren’t left stranded along the tracks.
The heads of the Sheet Metal, Air, Rail and Transportation Workers — Transportation Division union that represents conductors, and the Brotherhood of Locomotive Engineers and Trainmen union that represents engineers, criticized that decision as a move to increase pressure on shippers and Congress to intervene.
The federal law governing railroad contract talks won’t allow a strike or lockout before Friday.
The Associated Press contributed to this report.
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