Concerns grow over potential for national railroad strike

Supply chains that move major farm inputs and commodities have still not fully recovered from pandemic-related slowdowns and employee shortages. But the already tense situation would have worsened if the nation’s railroads shut down.

That’s why the prospect of a national railroad worker strike had set off alarm bells with farm groups and all along agribusiness supply chains, with members of Congress and the White House all trying to intervene.

For over two years, the National Carriers’ Conference Committee—representing the nation’s leading railroads—and a collection of 12 unions representing 140,000 railroad workers—have been trying to find a compromise. A preliminary agreement was announced Sept. 15 by the Biden administration and is still subject to a ratification vote.

On July 15, President Joe Biden appointed the three-member Presidential Emergency Board to develop a set of non-binding recommendations by Aug. 16 for the two parties to consider, according to Mike Steenhoek, executive director of the Soy Transportation Coalition.

“After the recommendations were released, the two parties have 30 days—concluding on September 16th—to accept the recommendations, arrive at a different agreement, or temporarily extend the current contract. Prior to September 16th, any strike or lockout is prohibited by law. However, if an agreement is not achieved, a strike or lockout starting on September 16th is possible,” Steenhoek notes.

The board’s recommendation would increase wages by 24% from 2020 through 2024, with an immediate 14.1% increase for employees, according to the National Railway Labor Conference.

The board also suggested $1,000 annual lump sum payments, adjustments to health care premiums, health benefit enhancements, and limited changes to work rules.

Portions of the wage increases and lump sum payments would be retroactive and will be paid out upon ratification of the agreements by the union’s membership.

If implemented, these recommendations would include the most substantial wage increases in decades—with average rail worker wages reaching about $110,000 per year by the end of the agreement, according to the National Railway Labor Conference. When health care, retirement, and other benefits are considered, the value of rail employees’ total compensation package, which already ranks among the highest in the nation, would average about $160,000 per year.

Ten of the 12 unions have reached agreements with the railroads. But the operating craft unions —BLET and SMART-TD—continued to demand changes that go beyond the PEB’s recommendations and, in some cases, were expressly rejected by the PEB. In particular, they cited the need for more paid time off for both sick days and routine medical appointments.

“The railroads should work towards a fair settlement that our members, their employees, would ratify. For that to happen, we must make improvements to the working conditions that have been on the bargaining table since negotiations began. Penalizing engineers and conductors for getting sick or going to a doctor’s visit with termination must be stopped as part of this contract settlement,” according to a statement from Jeremy Ferguson, president, SMART Transportation Division and Dennis Pierce, president, Brotherhood of Locomotive Engineers and Trainmen, Teamsters Rail Conference.

Senior White House officials met with staff from the Transportation Department, Energy Department and U.S. Department of Agriculture to encourage the railroad carriers and unions to strike a deal, and prepared for contingencies.

Already, major railroad companies have enacted or were preparing to place embargoes on certain materials, including anhydrous ammonia, as fears of a worker strike grow.

The Association of American Railroads said in a recent news release that the six Class I railroads planned to begin efforts to embargo “hazardous and security-sensitive materials,” including chlorine and chemicals used in fertilizer.

SMART-TD and the Brotherhood of Locomotive Engineers and Trainmen called the measures “corporate terrorism” and “scare tactics” meant to force Congress to impose an agreement between the two parties.

The deadline has worried farm groups, who fear the parties won’t be able to agree to a contract before fall harvest season.

According to the Association of American Railroads, railroads annually transport 1.5 million carloads of grain—including 340,000 carloads of soybeans. In addition, 248,000 carloads of processed soybeans (primarily soybean meal and soybean oil) are transported each year.

Editor’s note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.com.