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Freight Rail Unions and Carriers Running Out of Time to Avoid Strike That Could Cripple National Supply Chain

By Admin

Reported by William Padmore for Nebraska Public Media.

Freight rail workers are threatening to strike pending ongoing contract negotiations with the carriers they work for. If a strike does happen, roughly 116,000 workers will bring freight rail in the country to a halt, bringing difficulties to an already suffering supply chain.

Railroads are a critical part of the nation’s supply chain. Every year tons of resources like petroleum, lumber, food, and even packages from Amazon are moved across the country to ports and rail yards.

In Nebraska alone, Union Pacific, one of the largest freight carriers in the country, employs nearly 6,000 people in the state. Nebraska billionaire Warren Buffett’s company, Berkshire Hathaway, owns BNSF, another large freight rail carrier.

Business has been good for Class 1 rail carriers, defined by the Federal Railroad Administration as carriers that make over $490 million. Even with the ongoing pandemic, Union Pacific reports that in 2021 the company earned a record-breaking net income of $6.5 billion. All the while, the industry’s labor force has shrunk almost 21% since 2017, going from 147,000 workers to roughly 116,000. Now, an inter-union organization representing 13 Class 1 freight rail unions is saying that success came at the expense of working conditions for rail employees. The group, The United Rail Unions, lists among their grievances stagnated wages, sick leave, attendance policies, and train crew size.

Currently, The United Rail Unions and a group representing the seven Class 1 freight carriers ( National Railway Labor Conference) are waiting on a non-binding recommendation from a Presidential Emergency Board, summoned by President Biden in an attempt to hold off a strike.

And a strike does seem to be on the table. In the days before the emergency board was summoned, members of the labor group Brotherhood Of Locomotive Engineers and Trainmen voted 99.5% in favor of the move.

A recommendation from the emergency board is expected next week. If neither side agrees to the recommendation, then a 30-day “cooling off period” begins for both sides to continue negotiations. If they still can’t come to an agreement, both sides can then engage in what’s known as “self-help” measures – more commonly known as strikes or lockouts.

Wesley Boyce is an assistant professor of practice at the University of Nebraska Lincoln’s School of Business. He said with supply chains still recovering from pandemic disruptions, a strike or lockout would hurt basically everyone.

“It’s very much in everyone’s best interest to avoid a strike,” Boyce warned. “We’d have a mega, majorly negative impact on railroads, a majorly negative impact on workers. Consumers would very much feel the pain.”

Boyce added that if a strike were to go forward, industries most dependent on freight rail, such as the auto industry, would suffer most.

“We’ve already gone through a time where it was very difficult to get something like an automobile. But [a strike] would bring us back to, at least, the worst of that,” he said.

In fairness to the rail carriers, Boyce said they’re just doing what any business would: increasing their value.

“What they’re doing, though, is cutting less profitable routes. They’re sometimes closing facilities. They are running fewer trains that are actually longer or carrying more cargo, you could say, all while laying off workers and asking those that remain to do more.”

Boyce doesn’t think the sides will come to an agreement in this case, but they may not have to.

Because freight rail is so important, Congress has the power to mandate an agreement between unions and management. A rail strike in 1991 lasted only one day before Congress forced employees back to work.

Greg Regan is the president of the Transportation Trades Department with the AFL-CIO. He said the unions have been preparing for this scenario for months.

“We’ve been keeping members of Congress engaged and making sure they understand what the basis of this contract dispute is about,” Regan said.

Still, a congressional mandate brings its own risks. Neither side could wind up getting what they ask for. But Regan said it’s a risk worth taking for the long-term health of the industry.

“If we want to start building a workforce that can meet the service demands, we need to have a contract that people feel secure in that you can feel good about recruiting people into.”

The National Railway Labor Conference, the group representing carriers in negotiations, said in a memo that they’re willing to negotiate on several fronts including pay, health benefits, and a point-based attendance policy that the president of BLET called “draconian.”

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