Over 300 national- and state-level trade associations are pressing President Joe Biden to work with railroad unions and their employers to ratify all outstanding tentative labor agreements in order to prevent “a rail shutdown [that] would have a significant impact on the U.S. economy and lead to further inflationary pressure.”
The trade groups sent a letter to Biden dated Thursday asking for the White House’s involvement.
So far, the members of six unions have voted to ratify their labor contracts. However, two unions, the Brotherhood of Maintenance of Way Employes Division (BMWED) and the Brotherhood of Railroad Signalmen (BRS), recently voted against approving their agreements. Those two unions are renegotiating their proposed deals with the railroads.
The trade associations are concerned that more unions could vote against ratifying contracts. The ratification votes from the two largest unions, the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the International Association of Sheet Metal, Air, Rail and Transportation Workers Transportation Division (SMART-TD), are expected on Nov. 21. BLET and SMART-TD represent train conductors and engineers.
“We have seen two unions reject the agreement, and there are concerns that others may follow,” the trade group’s letter said. “If that were to be the case, we could witness a strike that would shut down the entire freight rail system.”
The railroads and unions have been negotiating a new contract since January 2020. But as negotiations continued to remain at an impasse, Biden appointed three labor relations experts over the summer to serve on a Presidential Emergency Board (PEB) and work with the railroads and the unions on finding ways to resolve the labor dispute and avert a strike. The tentative agreements between each of the unions and the railroads are based on PEB’s recommendations.
“Because the White House played such a central role in the process, we believe it can be helpful in continuing to move the process forward in a positive direction,” the letter said. “Otherwise, Congress will be called upon to act. We continue to urge that the contracts be ratified to provide stability and predictability to the system. Your involvement can only help make that happen and ensure there is no interruption to rail service.”
Thursday’s letter was signed by over 300 trade groups, including the Agriculture Transportation Coalition (AgTC), the U.S. Chamber of Commerce, the National Retail Federation, the American Trucking Associations and the Transportation Intermediaries Association, among others.
Labor Secretary Marty Walsh, Transportation Secretary Pete Buttigieg and Commerce Secretary Gina Raimondo also received copies of the letter.
The American Chemistry Council (ACC) signed the letter because U.S. chemical manufacturers represent one of the largest users of freight rail. The ACC says its members ship more than 33,000 carloads per week, which are worth $2.8 billion.
“The stakes are very high for the chemical industry since our members rely on freight rail, and they will be one of the first industries impacted if the threat of a potential strike grows and forces railroads to scale back service,” ACC said.
Even if a strike is ultimately avoided, the imminent threat of one would result in railroads not accepting security-sensitive shipments ahead of it. This scenario happened in September, when BLET and SMART-TD approved a tentative labor agreement hours ahead of when it would be legally permissible for union members to strike.
“Chemical facilities would start curtailing production within days after the start of a rail shutdown,” the ACC said. “A shutdown lasting more than a week would force many chemical facilities to shut down production completely.”
The American Fuel & Petrochemical Manufacturers (AFPM) also warned of potential economic consequences.
“While we hope the negotiating parties can reach an agreement on their own, failure is not an option, and we are heavily stressing to White House and Congressional leaders that it is critical they be ready to act to avoid a strike,” Rob Benedict, APFM vice president of petrochemicals and midstream, told FreightWaves. “A potential shut down of the entire freight rail system would drastically impact our liquid fuel and petrochemical industries and in turn the availability of the fuels and petrochemicals consumers rely on. And the impacts of a strike would be felt beyond the refining and petrochemical industries. It’s going to affect every industry. The economic disruption and costs to consumers that would result from a stoppage in freight rail service must not be allowed to happen.”
According to the National Carriers Conference Committee, the group representing the freight railroads in negotiations, six out of 12 unions have voted to ratify their agreements so far. There are about 115,000 total employees affected by the negotiations.
BMWED and BRS are maintaining the status quo through Nov. 19 and Dec. 4, respectively, as they return to the bargaining table. Following that, members could go on strike if a revised tentative agreement fails to pull through.
Should BLET and SMART-TD be unable to approve their proposed agreements, they would maintain the current situation until Dec. 9. However, all these dates could be subject to change so that the cutoff for maintaining the status quo would be aligned along the same date.
Questions about whether there is enough flexibility surrounding sick leave appear to be one of the main reasons why there has been an impasse during the negotiation process.
The Association of American Railroads has estimated that a rail network shutdown could cost as much as $2 billion per day.
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