US faces possible nationwide railroad freight strike

The US could face a nationwide railroad strike before the holidays as a union representing all freight railroad conductors voted down a labor agreement negotiated by the Biden administration.

The rail companies and the unions still have two and a half weeks to reach a new deal before a strike could take place on Dec 9. Union leaders said Monday they were ready to go back to the bargaining table.

Roughly 30 percent of freight moves by rail in the US. The Association of American Railroads (AAR) estimates that a nationwide rail shutdown could cost the country $2 billion a day in economic output.

The National Carriers Conference Committee said some businesses could start to be affected by the treat of a strike before the deadline because railroads will start curtailing shipments of perishable cargo like some food items and dangerous chemicals days ahead of the deadline.

There are now four unions with a combined membership of close to 60,000 workers that have voted down the agreement.

If no agreement is reached by Dec 8, two things could happen as early as 12:01 am on Dec 9: The railroads could lock workers out, or workers could go on strike.

If there is a strike, Congress likely would intervene within hours. The Railway Labor Act allows Congress to take any number of measures to get trains running again — including imposing some version of the contract or extending the status quo, kicking any decision to the next Congress.

Congress could step in to implement a cooling-off period or even force the workers to accept a deal.

"Let's be clear, if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy," said AAR President and CEO Ian Jefferies in a statement.

Any disruption to freight rail service would be a blow to the supply chain recovery and the economy. The group projects that a monthlong strike would pull close to $160 billion out of the economy, and lead to a 1 percent decline in GDP.

The White House helped broker the deal in September before the midterm elections. President Joe Biden described it as a win for all sides and the US economy. The railroads called it the most generous contract in modern history and noted that upon ratification, workers would see an average payout of $16,000 in back raises and bonuses.

But it didn't include any paid sick days, a major disappointment to workers after they helped carry the railroads through the pandemic. The unions were able to secure some protections for workers from the strict attendance policies employed by a couple of the railroads. Under the deal, workers can miss work to attend to medical issues without being assessed disciplinary points, but there are limitations, and the time off is unpaid.

But the 28,000-member SMART-TD union, which represents rail conductors, rejected the contract after one of its divisions voted it down — 50.87 percent voted against the deal.

Members of a second large union, the Brotherhood of Locomotive Engineers and Trainmen, which primarily represents 24,000 freight train engineers, approved the agreement, with 53.5 percent in favor.

"We were somewhat surprised," when members voted no, said Peter Kennedy, director of strategic coordination research at BMWED, the third-largest union, which voted down the contract in October.

The agreement gives workers a 24 percent raise over five years, an additional personal day, and caps on healthcare costs. It also includes some modifications to the railroads' strict attendance policies, allowing workers to attend to medical needs without facing penalties for missing work.

Meanwhile, two unions that voted down the contract last month — the Brotherhood of Maintenance of Way Employees and the Brotherhood of Railway Signalmen — are still holding out for paid sick leave. They've argued that railroad workers should receive the same amount that federal contractors are mandated to provide — 56 hours — but said they'll make a deal with less than that.

Several unions had expressed their discontent primarily over the proposed contract's lack of fully paid sick leave and other scheduling requirements.

"This is the best pay package I've seen in my career," said Kennedy, a rail veteran for nearly 20 years. "If employees are willing to vote that down because of the lack of paid sick time, that tells you something.''

But if any one of the unions decides to strike, all 12 will honor it, bringing the system to a standstill.

"This can all be settled through negotiations and without a strike," said Jeremy Ferguson, the president of the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers, or SMART-TD, in a statement. "A settlement would be in the best interests of the workers, the railroads, shippers and the American people."

Some of the country's commuter rail systems serviced by freight rail workers could be affected, including Metra, Chicago's commuter rail network; Washington DC-area MARC and VRE; Caltrain in the San Francisco Bay Area; and Metrolink in Southern California.

Travel on Amtrak could be affected because the majority of its tracks — with the exception of the busy Northeast Corridor — are owned and maintained by freight railroad companies.