Rail shippers confident Congress will avert strike

by | Nov 30, 2022 | Articles

Rail shippers confident Congress will avert strike

A collection of trade groups representing railroads and their shipper customers expressed confidence Tuesday that Congress will pass legislation to avert a crippling rail strike before Dec. 9, urging bipartisan support on Capitol Hill to codify into law the tentative agreement reached in September.

While uncertainty still exists, the likelihood of a strike halting rail traffic across the US during the holiday season has diminished significantly after House Speaker Nancy Pelosi announced Monday evening that the House of Representatives is drafting a bill to prevent a strike.

Eight unions have voted to ratify the tentative agreement the Biden administration brokered between management and labor in September, but four unions rejected the contract and set a deadline of Dec. 8 to reach a new deal. Under the Railway Labor Act, however, Congress has broad authority to pass legislation with a binding contract that the unions would be forced to accept.

Pelosi said the legislation being drafted in the House would force the implementation of the September agreement on all 12 unions. That deal would give workers a compounded 24 percent wage increase covering the period between 2020 and 2024.

Trade groups welcomed Pelosi’s comments.

“Having this proposal there gives us great hope that we’re going to get this legislation passed without a strike on Dec. 9,” Mike Seyfert, CEO of the National Grain and Feed Association, told reporters on a call Tuesday with other industry stakeholders. “But if you’re in business, the worst thing there is is uncertainty. And until Congress passes this, Dec. 9 is still hanging over your head. As long as the threat is there, we’ve got members who are going to have to pre-position as much product as they can.”

Seyfert added he’s confident the legislation will be enacted because “last time I checked, every constituent of every member of the US House and Senate has to eat.”

If a strike were to happen, the commodities affected include containerized freight, chemicals, coal, grain, petroleum, and automotive shipments, which combined account for about 80 percent of all US freight train traffic, according to the Association of American Railroads (AAR).

But Ian Jeffries, CEO of the AAR, said he believes Democrats and Republicans in Congress won’t let it come to that.

“If you look at history … Congress has voted on these matters with overwhelming bipartisan support and that’s something we’re calling on both Democrats and Republicans to repeat here because this is an economic issue,” he told reporters on the call.

Brian Dodge, president of the Retail Industry Leaders of America (RILA), emphasized that trade groups can’t stop pushing Congress until a bill to avert a strike has been approved and sent to President Joe Biden to sign into law. While holiday merchandise is in distribution centers or store shelves already, Dodge said that e-commerce parcels would be affected by a strike.

Parcel giant UPS is one of the largest customers of BNSF Railway and Union Pacific Railroad, but competitors FedEx and the US Post Office also rely on trains for the slowest and lowest-cost shipping options provided to customers.

“We can’t take anything for granted,” Dodge told reporters Tuesday. “We want to make sure that we’re informing lawmakers about the impact, lest they be unaware of what the effect would be of a work stoppage at this point. We want to be perfectly clear with them, so that they do take action and we avoid a shutdown.”

New management concessions are unlikely

Jeffries was unclear how the potential for Congressional action would impact the ongoing negotiations between US railroads and the four unions that rejected the September agreement, including the Sheet Metal Workers Air, Rail, and Transportation (SMART-TD), the country’s largest rail union.

Rank-and-file workers of the four unions rejected the tentative deal largely out of frustration over unpaid short-term sick time and attendance policies, according to union leaders. But it seems unlikely management will make additional concessions given the bill before Congress would codify the September agreement into law.

“We’re fully prepared to accept the terms of the tentative agreements that were met and reached in September,” Jeffries said. “We’ve remained willing to have discussions with those remaining unions that have not yet ratified for how they might want to proceed within the value framework of the tentative agreements that were based on recommendations from an expert panel appointed by President Biden.”

Source: JOC

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