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 9th.
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.