Rail strike looms on horizon, could cost U.S. $2B daily

Published: Sep. 13, 2022 at 6:12 PM CDT
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LINCOLN, Neb. (KOLN) -The rail industry is staring down a possible strike starting later this week from roughly 60,000 workers who are asking for better working conditions and benefits. It’s estimated that this strike could cost the U.S. $2 billion daily in lost productivity.

Largely, workers are asking for better working conditions- like pay and time off.

“The railroads, like everybody else, has a worker shortage,” Scott Swenseth, an associate professor of Supply Chain Management & Analytics at the University of Nebraska-Lincoln said. “There are some things that you just can’t not have people there for. So they have to have workers for the freight to move. And if they don’t have those workers, we would have a shutdown anyway. So they’re, they’re expecting their current workforce to pick up the slack. And it’s putting a burden on those workers.”

The disagreement between the eight major railways and the 12 major unions has been going on for a while. President Biden issued a “cooling-off” period in July. During that time, a Presidential Emergency Board was called. The board recommended increasing wages among other things.

“They’ve been in negotiations for a long time,” Swenseth said. “It came to a head earlier this year, but there was a cooling- period put in place to give them more time to try to come to an agreement.”

The cooling-off period was put in place by the federal government and ends Friday, Sept. 16.

Swenseth said the possibility of strike carries serious economic ramifications.

“We’ve been trying to bring down inflation, you add this to the mix, you’re likely to either slow any improvement that we would see, or see more inflationary pressure,” Swenseth said.

In Nebraska, a strike could spell economic disaster, especially for the agricultural sector. Many farmers depend on the railroad to move their crops across the country. Moving toward the colder months, a potential strike could create a supply chain issue for energy sources.

“If we can’t move that coal, we’re going to have to look for other energy sources to take care of that. We’re also coming up on fall and winter, where heating oil is going to be an issue. If we have to move to other energy sources like that… we’re already hearing about potential costs of heating oil and, diesel fuel and other items. Because of the kinds of pressures we’re putting on.”

In a statement to 10/11, Burlington-Northern-Santa Fe reports nine out of 12 unions have reached a tentative agreement, but every union has to be under agreement to enjoy a strike.

In a statement Sunday, Sept. 11, SMART-TD and BLET issued a joint-statement on the rail embargo.

“Late on Friday, September 9, the nation’s largest railroads began warning major shippers that they are declaring an embargo on certain types of new shipments five days in advance of the end of the federally mandated cooling-off period at 12:00 AM EDT September 16. They further advised that all rail shippers could be blocked from making any rail shipments well in advance of next Friday’s deadline for a lockout or strike. This completely unnecessary attack on rail shippers by these highly profitable Class I railroads is no more than corporate extortion.

Our Unions remain at the bargaining table and have given the rail carriers a proposal that we would be willing to submit to our members for ratification, but it is the rail carriers that refuse to reach an acceptable agreement. In fact, it was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our Unions, but they cannot legally lock out our members until the end of the cooling-off period. Instead, they are locking out their customers beginning on Monday and further harming the supply chain in an effort to provoke congressional action.

The railroads are using shippers, consumers, and the supply chain of our nation as pawns in an effort to get our Unions to cave into their contract demands knowing that our members would never accept them. Our Unions will not cave into these scare tactics, and Congress must not cave into what can only be described as corporate terrorism.

Rather than gridlock the supply chain by denying shipments and potentially locking our members out next Friday, the railroads should work towards a fair settlement that our members, their employees, would ratify. For that to happen, we must make improvements to the working conditions that have been on the bargaining table since negotiations began. Penalizing engineers and conductors for getting sick or going to a doctor’s visit with termination must be stopped as part of this contract settlement. Let us repeat that, our members are being terminated for getting sick or for attending routine medical visits as we crawl our way out of a worldwide pandemic.

No working-class American should be treated with this level of harassment in the workplace for simply becoming ill or going to a routine medical visit. Sadly, the Presidential Emergency Board recommendation got it wrong on this issue. As we have said from the day that they were implemented, these policies are destroying the lives of our members, who are the backbone of the railroad industry.

These employment policies have forced thousands of employees out of the industry and make it all but impossible to recruit new workers. With understaffed operations, these railroads abuse their best customers by refusing to provide deliveries consistent with their legal obligations. These self-appointed titans of industry complain constantly about government regulation and interference — except now when it comes to breaking the backs of their employees. It’s time for the federal government to tell the CEO’s who are running the nation’s railroads into the ground that enough is enough. Congress should stay out of the rail dispute and tell the railroads to do what other business leaders do — sit down and bargain a contract that your employees will accept.”

SMART-TD and BLET joint-statement

What will happen Friday is still unknown. The railways and unions could come to an agreement, or they could not and the strike would begin. The federal government could also request another cool-off period.

A strike is looming for the rail industry, 10/11 NOW's Madison Pitsch has the latest information.