Major rail unions edge closer to strike

Exclusive: Potential railroad strike could cost US economy $2 billion a day

Two of the biggest railway unions in negotiations with rail carriers have drawn a line in the sand: They are demanding that more quality of life provisions be included in the contract, covering attendance policies, holidays and on sick days, otherwise they will go on strike.

The Brotherhood of Locomotive Engineers and Trainmen and the SMART Transportation Division represent half of unionized railroad workers.

Eight of the 12 unions have reached tentative agreements with rail carriers, according to the National Carriers Conference Committee. They did not negotiate the quality of life provisions, sources familiar with the negotiations told CNBC. Unions have what are called “Me Too” agreements, which means that whatever benefits BLET and SMART unions agree in their contract with carriers, members of other unions receive.

“If this contract is presented to our members in its current form, it will not pass,” a union spokesperson told CNBC. “Workers are angry. They want attendance policies to change and not be afraid to take a sick day or vacation without fear of being fired. be resolved.”

A spokesperson for the railroads told CNBC they would not comment on the ongoing negotiations, but stressed: “The railroads remain in active discussions with unions who have not yet reached labor agreements. principle and will continue to make every effort to reach agreements based on the recommendations of the PEB”.

In July, President Biden appointed a Presidential Emergency Council in hopes of averting a strike and make recommendations that the railways and the unions could agree on.

Attendance policies and staffing have been a point of contention in the last two years of this negotiation. More than 700 union workers quit after BNSF, a wholly-owned subsidiary of Berkshire Hathawayinstituted a points-based attendance system in February. The system was revised in May but unionized workers say the changes have not addressed safety issues, calling them “brutal”. Labor sources said CNBC employees would be penalized if they took the day off to attend their parents’ funerals.

The railroad argued the new policy is key to ensuring it has enough workers available for its trains. Rails came under scrutiny for deteriorating service unions, shippers and regulators.

A track maintenance worker walks along a newly laid segment of railroad track on the Burlington Northern Santa Fe (BNSF) Railway Co. Southern Transcontinental line in Alva, Oklahoma, U.S., Wednesday, August 19, 2015.

Bloomberg | Bloomberg | Getty Images

“The railroad took care of its labor issues,” said a union insider with knowledge of the negotiations. “They’ve made major staff cuts to appease shareholders and improve their bottom line. The workers are burnt out. You’ve heard of the railroads they’re hiring, but they’re not retaining talent because of the system of points where you are on call 12 hours a day and you have to be an hour or less away from your job.They are taken hostage.

As railroads say they’ve been hiring aggressively amid supply chain struggles, the US Surface Transportation Board reported the largest freight railroads in the United States have reduced their workforce by 29% in the past six years.

About 40% of the country’s long-distance trade is carried by rail, more than any other mode of transportation. If the unions went on strike, more than 7,000 trains would be grounded and the rail industry estimated that it costs the economy up to $2 billion a day.

The American Trucking Associations have written a letter to Congress urging action – as have several other industry groups representing sectors such as retail and agriculture – and noting that a current shortage of truckers is making it difficult for the industry to handle more than freight.

“Idling the 7,000 daily long-haul freight trains in the United States would require more than 460,000 additional long-haul trucks each day, which is not possible due to equipment availability and a current shortage of 80,000 drivers,” ATA President and CEO Chris Spear said in the letter. “So any disruption in rail service will create havoc in the supply chain and fuel inflationary pressures at all levels.”

Railways launch emergency measures for freight

Starting today, the railways are securing and managing cargo and safety-sensitive hazardous materials such as chlorine used by water utilities to purify beverage and chemicals used in fertilizer in case of strike. Norfolk Southern issued an alert to customers about measurements.

“We have communicated to our customers that we will be temporarily halting certain types of shipments beginning September 12. Additionally, to safely slow down our network and allow us to restore service quickly, some other customers will see a preliminary reduction in service. before Sep. 16.”

The American Association of Railroads says the carriers follow federal regulations.

“Operational changes necessary to prepare for a safe and orderly suspension have been delayed for as long as possible,” a spokesperson for the railroads wrote in an email to CNBC. “Within one week of a potential service disruption, carriers are required to take appropriate steps to prepare, including planning to handle HAZMAT shipments, as well as other cargo that may be affected if the service must be reduced or discontinued. Notification to customers is an essential part of this contingency planning.”

The spokesperson added that the railways do not believe a disruption of national service is inevitable, “but the time has come when some customers will start to be affected if agreements are not reached”.

A railroad union spokesperson told CNBC: “The railroads can’t legally lock us down, so they’re resorting to extortion from shippers. Impacting supply chain, shippers will go to Congress to demand action. Congress must not back down.”

Will Congress intervene?

The last time Congress intervened was in 1992 after the Machinists Union strike CSX in a dispute over a new employment contract. Then US President George Herbert Walker Bush called on Congress to act quickly. President Bush signed the back-to-work bill into law after the two-day strike that halted national freight rail service.

“These self-proclaimed titans of industry constantly complain about regulation and government interference – except now when it comes to breaking the backs of their employees,” said Teamsters-affiliated BLET. and the SMART transportation division. in a report. “It’s time for the feds to tell the CEOs who run the nation’s railroads in the ground that enough is enough. Congress should stay out of the rail dispute and tell the railroads to do what other CEOs are doing. business – sit down and negotiate a contract that your employees will accept.”

CNBC has been told by the railroads and unions that negotiations will continue on Monday. Unions can strike on Friday.

Correction: Eight of 12 unions have reached tentative agreements with rail carriers, according to the National Carriers Conference Committee.

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