This week, President Biden officially called on Congress to pass legislation adopting a tentative labor agreement between railroads and the workers without any modifications or delay. On Wednesday, the House approved a bill doing just that, as well as separately approving an amendment to add seven days of paid sick leave to the agreement. Today, the Senate approved a clean agreement, rejecting both the additional paid sick leave and a 60-day extension. As of this writing, it will now head to the President’s desk for signature.

Background

In September the Biden administration brokered an agreement between the railroads and 12 rail labor unions. The deal includes notable provisions on wage increases, scheduling predictability, leave policies, job assignments, and arbitration backstops. The September 15 announcement kicked off a union-by-union membership effort to vote for, or against, the agreement. Federal law prohibits both the railroads and rail workers from engaging in any strikes or work stoppages until a certain number of days after the rejection of a labor agreement has occurred. This ‘cooling off’ period expires on Friday, December 9^th.

In the end, eight unions voted for ratification while four unions voted against, predominately due to dissatisfaction on sick leave. With parties back at the negotiation table, the expectations of a revised deal were very low, prompting the President’s call for Congressional action.

Impact Forecast

According to the Association of American Railroads, a disruption to the railroad network, even for a brief time, could result in $2 billion a day hit to the overall economy. In the run up to the December 9 deadline, the rail lines and certain shippers would have had to start taking contingency actions (possibly as early as December 5) to minimize issues as much as possible. This would have meant halting shipments of hazardous and security-sensitive materials to ensure they don’t sit unsupervised on idled rail cars for long periods. Fertilizers, disinfectants, fuels, and other necessary farming inputs rely heavily on rail transport; a prolonged strain could have slowed or halted supply delivery, driven up prices even more, and thrown growing operations and schedules into uncertainty.

A lack of available rail could have also forced shippers to move more by truck as an alternative, driving up demand and draining the available chassis supply. For our exporting and importing members reliant on maritime transport, rail disruptions could lead to another cascading container backlog on the on-dock or near-dock tracks to and from the ports.

WG Action

WG closely tracked the progression of the negotiations and engaged with Congress on the importance of avoiding a rail stoppage. This week, we redoubled efforts and worked with a broad coalition of industry partners to urge the swift, bipartisan adoption of the September agreement.  Read the coalition letter to Congress here.

Please contact Tracey Chow ([email protected] or 202-704-7312) for more information.

Western Growers recently met with Walmart leadership to discuss Walmart’s Supplier Quality Excellence Program (SQEP). Walmart’s team is interested in learning more about how they can improve the quality of pallets that are entering the system before they make it to suppliers. They are also open to hearing more about the dispute resolution process for SQEP fines and how the process might be revisited or better communicated.

Our team is currently looking for information to help the industry lessen SQEP issues down the road and better educate Walmart leadership to the real-world supplier scenarios and issues that are occurring. To facilitate further discussions, Western Growers is asking for your input. (Please note, all answers will be kept confidential and aggregated with other shipper feedback.)

Western Growers will meet with Walmart again to discuss these questions in early January. Our goal is to have all answers compiled by December 15th.

1. Can your team perform inspections using Walmart SQEP specs to determine the percent of issues upon pallet delivery? What are the top issues seen in pallets at delivery?

a. We want to help Walmart determine the percent of pallets you would normally want to send back to CHEP because they don’t meet specs and might lead to fines. Any information by region or about demand affecting quality at certain times of year would also be helpful.

2. Can you detail the SQEP fine notification process within your company? Please detail who gets (1) notifications and (2) fine summaries, and what your team does with each once they are received. Do you feel that the information Walmart has provided allows for a satisfactory resolution to your issues?

b. We are trying to determine if these issues are getting sent to the right employees for resolution and how to best help with disputes.  

3. Can you share examples of lessons learned or best practices from your team related to Walmart’s SQEP?

All feedback can be sent to Bryan Nickerson by email at [email protected] or by phone at 949.885.2392.