Consumers could pay a price if railroads and unions fail to agree

OMAHA, Neb. (AP) – Consumers could experience higher gas prices and shortages of some of their favorite groceries during the winter holiday season if the railroads and all of their unions can’t agree on new contracts by early December that was already pushed back.

The likelihood of a strike that could paralyze the country’s rail services grew on Monday when the largest of the 12 railroad unions, which mostly represents conductors, rejected management’s latest offer, which included a 24% pay rise. With four of the 12 unions seeking a better deal, it may fall to Congress to push through one to protect the US economy.

The Retail Industry Leaders Association said a rail strike would “tremendously disrupt the flow of goods across the country” despite retail stores being well stocked for the crucial Christmas shopping season. It’s not clear what a strike would mean for packages, as FedEx and UPS, both of which rely partly on rail, have not given specifics.

“Fortunately, this year’s Christmas gifts have already landed on store shelves. But a disruption in rail service poses a significant challenge to the timely delivery of items such as perishables and e-commerce shipments, and it will undoubtedly add to the inflationary pressures already hitting the US economy,” said Jess Dankert of the group representing more than 200 major retailers.

Even as the deadline approaches, problems could arise as railroads prematurely freeze shipments of chemicals and perishables. And commuters could be stranded in a strike because so many passenger trains run on tracks owned by freight railroads.

Pretty much every industry could be affected because so many companies need railroads to deliver their raw materials and finished products. And there aren’t enough trucks to fill the gap.

There is no immediate threat of a strike, although four unions have rejected deals that the Biden administration helped broker before the original strike deadline in September. These unions agreed to return to the negotiating table to try and negotiate a new deal before a new strike deadline on December 5. But those talks have stalled because the railroads refuse to consider additional paid sick leave to the five-year contracts they are offering, which include a 24% raise and $5,000 in bonuses.

Railroad engineers voted Monday to join seven smaller unions to approve their deal, but the largest union, representing Schaffner, rejected their contract and joined the three unions who previously voted no.

It seems increasingly likely that Congress will have to settle the dispute. Legislators have the power to impose contract terms when both sides can’t reach an agreement, and hundreds of business groups have been pushing for it Congress and President Joe Biden are said to be ready to intervene.

Workers, frustrated by the industry’s demanding schedules and deep downsizing, pushed for rejecting these contracts because they would not do enough to address workers’ top quality of life concerns. The agreements for the engineers and conductors included a promise to improve the scheduling of regular days off and to further negotiate the details of these schedules with each railroad. Those two unions were also given three unpaid days off a year to attend to medical needs provided they were scheduled at least 30 days in advance, and the railroads said they would give workers hospitalized under their strict attendance policies not punish.

The railroads also lost their offer to reduce crew size to one person as part of the negotiations. But the heads of the transportation division of the International Association of Sheet Metal, Air, Rail and Transportation Workers Union still narrowly rejected the deal by around 51 percent. A smaller branch of the SMART-TD union, representing around 1,300 shipyard masters, has approved the deal.

“The ball is now in the lanes. Let’s see what they do. You can work this out at the negotiating table,” said SMART-TD President Jeremy Ferguson. “But the railroad executives, who constantly complain about government interference and routinely badmouth regulators and Congress, now want Congress to negotiate for them.”

The railways claim that the agreements with the unions should follow the recommendations closely made this summer by a special panel of arbitrators Biden appointed. That’s one of the reasons they don’t want to offer paid sick leave. Also, the railroads say unions have agreed over the years to forgo paid sick leave in favor of higher wages and strong short-term disability benefits.

Unions say it is long overdue for railroads to offer paid sick leave and that the pandemic has underscored the need for it.

The group, which is negotiating on behalf of the railroads, said on Monday that unions that have rejected their agreements should not expect to receive more than the presidential arbitration panel recommended. The National Carriers Conference Committee said businesses could be hit by the threat of strikes before the deadline, as railroads will begin restricting shipments of hazardous chemicals and perishable cargo days before the deadline.

“A nationwide rail strike would hit the economy and the public hard. Now, the ongoing, near-term threat from a freight rail and passenger carrier will soon begin to take responsible steps to secure the network safely before a deadline,” the railroads said.

It’s unclear what Congress might do given the deep political divisions in Washington DC, and a single legislature could stall a resolution. But Association of American Railroads trade group chief Ian Jefferies said: “If the remaining unions don’t accept an agreement, Congress should be ready to act and avoid catastrophic $2 billion a day in damage.” for our economy.”

Republicans could try to push through a deal that includes only the Presidential Emergency Board’s recommendations, while Democrats, who still narrowly control the House and Senate at this stage of the lame-duck, could try to nudge the railroads into additional concessions force.

The unions, which announced their votes Monday, represent more than half of the approximately 115,000 railroad workers involved in contract disputes with Union Pacific, Norfolk Southern, BNSF, Kansas City Southern, CSX and other railroads.


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