Deadline to block freight rail strike looms before Biden

By JOSH FUNK
AP Business Writer

OMAHA, Neb. (AP) — The deadline for President Joe Biden to intervene and keep 115,000 railroad workers from going on strike and disrupting deliveries of cars, crops, containers of imported goods and countless other products and raw materials is looming.

Biden is widely expected to name a board of arbitrators to review the contract dispute and make recommendations on how to settle it before Monday’s deadline. Once he does that, any strike or lockout will be delayed 60 days under the federal law that governs railroad contract talks.

A White House official said the Biden administration is going through the standard process to decide whether to appoint this special board to intervene in the contract talks.

Businesses that rely on railroads have urged Biden to appoint that Presidential Emergency Board to try to bring the freight railroads and workers together to reach a deal. Groups including the U.S. Chamber of Commerce and major trade groups of railroad shippers all wrote to Biden over the past month since the talks deadlocked and mediation officially ended to say a rail strike could cause catastrophic disruptions in the economy.

“Any strike is bad,” said Rob Benedict with the American Fuel and Petrochemical Manufacturers group that represents refineries and other chemical companies. “We want to avoid that at all costs especially when we are in a precarious situation like our nation is now in kind of our current supply chain crisis.”

Adding to the supply chain worries is a separate labor dispute involving 22,000 West Coast dockworkers at ports that handle roughly 40% of U.S. imports. Both sides in those negotiations have said they plan to keep cargo moving until a new agreement is reached even though their contract expired at the beginning of July. The ports rely on railroads to deliver many of the goods they handle.

The presidential board can only make nonbinding recommendations on the railroad contracts, but those will serve as the basis for a new round of negotiations that could yield a contract that has eluded the railroads since talks began more than two years ago.

Even if those efforts fail, Congress would likely intervene to prevent a strike. Lawmakers could impose terms on the railroads and their 12 unions at that point or take other action to keep the trains moving.

The National Carriers’ Conference Committee that represents Union Pacific, BNSF, CSX, Norfolk Southern, Kansas City Southern and other railroads said it believes the wage increases railroads are offering are fair based on other recent major labor agreements, but the unions say none of the offers so far do enough to offset inflation or reflect the current worker shortages. Plus, the railroads want workers to pay more of their health insurance costs, which the unions say would eat up most, if not all, of the proposed raises.

NCCC Chairman Brendan Branon said the railroads are disappointed a deal hasn’t been reached yet, but they’re hopeful the presidential board will help.

“It remains in the best interests of all parties – and the public – for the railroads and rail labor organizations to settle this bargaining round by entering mutually acceptable agreements that provide prompt pay increases to the nation’s hard working rail employees and prevent rail service disruptions,” Branon said in a statement.

The unions say a better contract would likely help ease the railroads’ struggles to hire more workers to reduce delays in deliveries and improve service in response to complaints from shippers and regulators. The railroads have been having significant problems keeping up with demand this year as the economy improves — forcing some businesses to slow production while waiting for trains — and they say hiring hundreds more workers is key to improving service.

Many of the companies who ship goods on the rails, labor groups and regulators blame the railroads’ current shipping problems on those deep worker cuts while the railroads say the nationwide worker shortages and difficult hiring environment has kept them from hiring enough workers to handle all the shipments as the economy recovers.

In the contract talks, the unions also adamantly oppose railroad proposals to cut train crews down from two people to one.

Union officials say they don’t want to strike but they appear ready to act if it does come to that. The Brotherhood of Locomotive Engineers and Trainmen said this week that more then 99% of its members voted to authorize the union to go on strike if a deal can’t be reached.

“In the end, the question of whether or not any of the rail industry’s union-represented employees want to legally strike is secondary to what they truly want,” BLET President Dennis Pierce said. “They want a contract with meaningful wage increases and good benefits. They want jobs that give them the ability to have a life outside of work. To be clear, there would be no need for a strike vote if any of that had happened in these negotiations.”

The workers who kept the railroads running throughout the pandemic are frustrated they haven’t had a raise since 2019, and they’re fed up with the working conditions and schedules they have to endure after the major freight railroads cut nearly one-third of their jobs over the past six years as they overhauled operations.

“With a stale contract that has been in effect since prior to inflation taking hold, the workers have nothing to show for their blood, sweat and tears, as well as the sacrifices they and their families have made,” said Jeremy Ferguson, president of the Sheet Metal, Air, Rail and Transportation Workers — Transportation Division union that represents conductors.