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On Oct. 27, a coalition of 322 organizations that support the nation’s Class I freight railroads wrote a letter to President Joe Biden urging the White House and administration officials to continue seeking a resolution to an increasingly bitter contract dispute that could lead to a nationwide rail strike in November or December and could cause significant damage to the US economy.
“Today we appeal to you to continue to work with the railroad unions and the railroads to ensure that the parties ratify the preliminary agreement that you helped broker. It is critical that these contracts be ratified, as a rail shutdown would have a significant impact on the U.S. economy and lead to further inflationary pressures,” said the letter, which was written by a broad group of trade associations, including American Trucking. Associations. Other groups that signed the letter include the National Retail Federation, the U.S. Chamber of Commerce, the American Farm Bureau, the International Shippers Association and the International Bottled Water Association.
“Unfortunately we have seen two unions reject the agreement and there are fears that others may follow. If that were the case, we could be witnessing a strike that would shut down the entire freight rail system. Because the White House has played such a central role in this process, we believe it can be helpful in continuing to move the process in a positive direction,” the letter said.
Otherwise, “Congress will be called upon to act,” the letter added.
The letter was sent after a second union, the Brotherhood of Railway Signalmen, said its members rejected a preliminary agreement signed on October 26 by Labor Minister Marty Walsh and others by more than 60%. The agreement was reached after late-night negotiations in mid-September, hours before a nationwide deadline.
According to the Associated Press, union president Michael Baldwin said the railroads’ “lack of good faith negotiations” and the recommendations of a board of arbitrators, which Biden appointed this summer, deprived workers of their “fundamental right to paid sick leave.”
Unions say the railroads, including a pair that reported profits of more than $1 billion in the third quarter, can easily afford to offer paid sick time. The negotiations involved CSX, Union Pacific, Norfolk Southern, BNSF and Kansas City Southern railroads.
While roughly 115,000 workers in 12 unions are due a 24% pay increase over five years and $5,000 in bonuses, union members say management’s position on paid leave, holiday schedules and other language-related issues contract, the dispute is at the heart of it, and it’s much wider issues that they’re concerned about than just money.
To date, six of the 12 major rail unions, including two of the largest, have ratified the deal, two have rejected it, and four more unions plan to vote on the preliminary package in the coming days.
“We applaud your administration for leading this issue from the beginning. With your help, from the creation of the Presidential Emergency Council to participation in direct negotiations between the parties, a preliminary agreement was reached on September 15,” the letter notes.
Trucking experts say a nationwide rail strike would be devastating to the U.S. economy, especially if it occurs during the peak retail season in November and December.
The National Retail Federation says consumers will spend a record $886.7 billion in 2021. Railroads carry an estimated 30% of the nation’s freight, and the White House and transportation officials say the trucking industry doesn’t have enough capacity to handle the strike.
“We continue to call for the ratification of the contracts to ensure stability and predictability of the system. Your participation can only help to make this happen and ensure that rail service is not interrupted,” the letter said.
If there was a railway strike, it is not known how long it would last. Under the Railroad Labor Act of 1926, courts and Congress have the power to intervene in disputes, and lawmakers can impose settlements. However, union leaders seem to be moving away from the idea of labor conflict.
“I have to stand up to some fringe groups who are proposing dangerous ideas of unauthorized work stoppages,” Brotherhood of Maintenance of Way Employees chapter president Tony Cardwell wrote in an Oct. 26 letter to union members. BMWED is the first union to withdraw from the agreement. “Workers should be wary of a group throwing grenades from behind a wall of secrecy. BMWED will not support or condone an illegal work stoppage, and our bylaws prohibit wages or other benefits for an illegal strike.”
Cardwell said he believes the collective bargaining process will eventually lead to an agreement.
Railroad workers have estimated that a railroad strike could cost the economy $2 billion a day.