Shoppers may pay price as unions, railroads clash

Likelihood of rail strike during holiday season grows amid contract disputes

OMAHA, Neb. — Consumers could see higher gas prices and shortages of some of their favorite groceries during the winter holiday season if railroads and all of their unions can’t agree on new contracts by a Dec. 5 deadline that had already been pushed back.

The likelihood of a strike that could paralyze the nation’s rail traffic grew Monday when the largest of the 12 rail unions, which represents mostly conductors, rejected management’s latest offering that included 24% raises. With four of the 12 unions holding out for a better deal, it might fall to Congress to impose one to protect the U.S. economy.

The Retail Industry Leaders Association said a rail strike “would cause enormous disruption to the flow of goods nationwide,” although retail stores are well stocked for the crucial holiday shopping season. It’s not clear what a strike would mean for packages because FedEx and UPS, which both rely on rail to some degree, haven’t commented in detail.

“Fortunately, 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, and it will undoubtedly add to the inflationary pressures already hitting the U.S. economy,” said Jess Dankert with the group that represents more than 200 major retailers.

Even getting close to the deadline could cause problems because railroads will freeze shipments of chemicals and perishable goods ahead of time. And commuters could be stranded if there is a strike because so many passenger railroads operate on tracks owned by the freight railroads.

Just about every industry could be affected because so many businesses need railroads to deliver their raw materials and completed products. And there aren’t enough trucks to pick up the slack.

There’s no immediate threat of a strike even though four unions have rejected the deals that the Biden administration helped broker before the original strike deadline in September. Those unions agreed to return to the bargaining table to try to hash out a new agreement before a new Dec. 5 strike deadline. But those talks have deadlocked because the railroads refuse to consider adding paid sick time to the five-year deals they’ve offered, which feature 24% raises and $5,000 in bonuses.

Railroad engineers voted Monday to join seven smaller unions in approving their deal, but the biggest union that represents conductors rejected its contract, joining the three unions that previously voted no.

Lawmakers have the power to impose contract terms if both sides can’t reach an agreement, and hundreds of business groups have urged Congress and President Joe Biden to be ready to intervene.

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