US railroads brace for strike that could cost billions

Railroad unions brace for strike that could cost billions

US freight railroads and unions are taking measures to prepare for a potential walkout, as labour talks reach further tentative agreements.

The Association of American Railroads (AAR) has warned customers of potential service disruptions in anticipation of planned strike action on 17 September.

According to its recent statement, railroads are making contingency plans to handle sensitive cargo to ensure this is not left unattended in the event of a work stoppage.

“The six Class I freight railroads participating in national bargaining will begin to take steps to manage and secure the shipments of hazardous and security-sensitive materials, such as chlorine used to purify drinking water and chemicals used in fertiliser, starting as early as 12 September,” reads the statement.

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In the meantime, meetings to reach tentative agreements have moved ahead.

The National Carriers’ Conference Committee (NCCC), which represents the nation’s freight railroads in national collective bargaining, announced on 11 September that more tentative agreements were reached – with the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters, the International Brotherhood of Boilermakers, and the International Association of Sheet Metal, Air, Rail and Transportation Workers – Mechanical Department.

It added that these agreements follow the 16 August recommendations of Presidential Emergency Board (PEB) No. 250.

They include a 24 per cent wage increase during the five-year period from 2020 through 2024 — with a 14.1 per cent wage increase effective immediately — and five annual $1,000 lump sum payments.

Last month, US President Joe Biden appointed a PEB to help avoid disruptions to food and fuel supplies and rising inflation.

“It is critical that the remaining unions promptly reach agreements that provide pay increases to employees and prevent rail service disruptions,” noted the NCCC in its statement.

“The carriers are in active discussions with the remaining unions about finalising agreements based on the PEB’s recommendation. However, the two operating craft unions, BLET and SMART-TD, continue to maintain positions that were expressly rejected by the PEB.”

Under the Railway Labor Act, carriers and unions that have not reached agreements remain in a “cooling off” period. Voluntary settlements with all unions would avert any potential disruptions to rail service after the cooling off period ends on 16 September.

The AAR has further noted that should negotiations remain unsettled, a nationwide shutdown could cost up to $2 billion a day, threaten supply chains, and worsen inflation.

“As the freight sector heads into peak shipping season, a nationwide rail work stoppage would result in an unnecessary $2 billion daily economic hit,” said AAR President and CEO Ian Jefferies.

“President Biden’s PEB recommended terms that would maintain the highest quality health care coverage and result in compounded wage increases of 24 per cent, bonuses totalling $5,000 — the highest pay increases in nearly 50 years.”

As the deadline approaches, railroads are calling on Congress to ready legislation that would implement the PEB’s recommended terms in whole.

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