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Railroad Deal Deadline Looms

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    Freight train cars and containers at Norfolk Southern Railroad’s Conway Yard in Conway, Pennsylvania (AP/Gene J. Puskar)


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Railroad engineers voted in favor of a deal with United States railroads Monday. But conductors rejected theirs. Rail transportation is in a shaky situation. All 12 railroad unions must approve any contracts to prevent a strike. A walk-out could cripple supply chains and hamper a stressed U.S. economy still emerging from the pandemic.

The Retail Industry Leaders Association (RILA) says a rail strike “would cause enormous disruption to the flow of goods nationwide.”

“This year’s holiday gifts have already landed on store shelves. But an interruption to rail transportation does pose a significant challenge to getting items like perishable food products and e-commerce shipments delivered on time,” says Jess Dankert of RILA. His group represents more than 200 major retailers. He adds, “It will undoubtedly add to the inflationary pressures already hitting the U.S. economy.”

A strike would also hinder passenger rail travel.

The two biggest railroad unions—engineers and conductors—split the vote Monday. Along with the conductors, three other unions also rejected their deals with the railroads. Seven smaller unions plus the engineers approved the five-year offering that includes a 24% raise and $5,000 each in bonuses.

Many workers are still frustrated with demanding schedules and deep job cuts in the industry. They say the proposed contracts don’t resolve workers’ quality-of-life concerns. (Read about the early days of the discussions in All [Not?] aboard U.S. Rails.)

Union officials agreed to return to the bargaining table. They hope to hash out a new agreement before a new strike deadline early next month. But those talks have deadlocked. That’s because the railroads refuse to add paid sick time to the offer.

The unions argue that railroads should have given paid sick time to workers long ago. They say the pandemic highlighted that need.

Meanwhile, railroad officials maintain that contract deals should follow proposals made this summer by a President Joe Biden-appointed panel. They say the unions agreed to give up paid sick time in favor of higher pay and strong short-term disability benefits.

The ongoing wrangling may force Congress to settle the dispute. Lawmakers could impose contract terms if both sides can’t reach an agreement. Congress can also block a strike. Hundreds of business groups urge Congress and President Joe Biden to be ready to intervene.

“A national rail strike would severely impact the economy and the public,” the committee representing the railroads says. “Now the continued, near-term threat of one will require that freight railroads and passenger carriers soon begin to take responsible steps to safely secure the network in advance of any deadline.”

The head of the Association of American Railroads trade group, Ian Jefferies, says, “If the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy.”

(Freight train cars and containers at Norfolk Southern Railroad’s Conway Yard in Conway, Pennsylvania. AP/Gene J. Puskar)