Clash of unions, railroad threatens supply chain
Conductors reject latest offer from management, including 24% raises and $5,000 in bonuses
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 an early-December deadline that had already been pushed back.
The likelihood of a strike that would 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, which included 24% raises and $5,000 in bonuses. With four of the 12 unions that represent half of the 115,000 rail workers 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” 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 dangerous 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.
Tom Madrecki with the Consumer Brands Association said a rail strike “would effectively bring hundreds of America's largest food, beverage, household and personal care manufacturing operations to a halt in a matter of days as inputs and ingredients run out. On-shelf availability and accessibility will quickly drop, compounded by almost inevitable panic buying.”
There's no immediate threat of a strike even though four unions have rejected deals the Biden administration helped broker before the original strike deadline in September. Those unions agreed to try to hash out a contract before a new Dec. 5 strike deadline.
But those talks have deadlocked because the railroads refuse to add paid sick time to what they've already offered.
Railroad engineers voted Monday to join seven smaller unions in approving the deal, but the conductors union rejected its contract, joining three unions that previously voted no.
It appears increasingly likely that Congress will have to settle the dispute. Lawmakers have the power to impose contract terms, and hundreds of business groups have urged Congress and President Joe Biden to be ready to intervene.
White House press secretary Karine Jean-Pierre reiterated to reporters on Monday that Biden believes “a shutdown is unacceptable” but that “the best option is still for the parties to resolve this themselves.” “The ball is now in the railroads' court. Let's see what they do. They can settle this at the bargaining table,” SMART-TD President Jeremy Ferguson said. “But, the railroad executives who constantly complain about government interference and regularly bad-mouth regulators and Congress now want Congress to do the bargaining for them.”
Dennis Pierce, the president of the Brotherhood of Locomotive Engineers and Trainmen union, said the deal engineers ratified should help improve working conditions somewhat, but that the railroads must address workers' frustrations, especially after they cut nearly one-third of their jobs over the past six years as they overhauled their operations.