U.S. railroad strike averted by late-night deal

Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by the Biden administration to avert a railroad strike that could have hit food and fuel supplies across the country and beyond.

If they accept the deal, workers whose pay had been frozen will win double-digit increases and exceptions to employer attendance polices that will allow them to seek certain types of medical care without fear of being punished, union leaders said. The agreement includes an immediate 14.1% wage rise, the railroads said.

U.S. President Joe Biden announced the deal early on the morning of September 15, calling it “a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years.”

Unions will now vote on the agreement. Even if those votes fail, a railroad strike that could have happened as soon as midnight Friday has been averted for several weeks due to the standard language included in such a deal, a person familiar with the negotiations said.

A rail shutdown could have frozen almost 30% of U.S. cargo shipments by weight, stoked inflation, cost the U.S. economy as much as $2 billion per day and unleashed a cascade of transport woes affecting the U.S. energy, agriculture, manufacturing, healthcare and retail sectors.

The impact would have stretched beyond U.S. borders because trains link the United States to Canada and Mexico and provide vital connections to massive ships that ferry goods from around the globe.

Biden administration officials hosted labor contract talks into the night on Wednesday aiming to secure an agreement between unions which represent 115,000 workers and railroads including Union Pacific (UNP.N), BNSF, CSX (CSX.O), Norfolk Southern (NSC.N) and Kansas City Southern.

Negotiations between the companies and a dozen unions had stretched for more than two years, leading Biden to appoint an emergency board to help break the impasse.

Freight railroads had halted transportation of hazardous goods, including chlorine for water purification and ammonia for fertilizer, as well as shipments of refrigerated food and other goods that use rail and at least one other mode of transport. Their goal was to prevent cargo from being stranded in unsafe locations.

Source: Reuters

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