Biden administration pressures unions, railroads to avoid shutdown

The United States Chamber of Commerce building is seen in Washington, DC, U.S., May 10, 2021. REUTERS/Andrew Kelly

WASHINGTON/LOS ANGELES, Sept 12 (Reuters) – The Biden administration urged railroads and unions to reach a deal to avoid a shutdown of rail work, saying on Monday it would pose “an unacceptable outcome” for the U.S. economy that can cost 2 billion dollars per day.

Railroads, including Union Pacific ( UNP.N ), Berkshire Hathaway’s ( BRKa.N ) BNSF, CSX ( CSX.O ) and Norfolk Southern, have until one minute after midnight Friday to reach tentative agreements with holdout unions representing around 60,000 workers. Failure to do so opens the door to union strikes, employer lockouts, and congressional intervention. read more

US Labor Secretary Marty Walsh is postponing his trip to Ireland to remain in talks, the department said on Monday.

“The parties continue to negotiate, and last night Secretary Walsh re-engaged to push the parties to reach a resolution that averts any shutdown of our rail system,” a Department of Labor spokesperson said. “All parties must stay at the table, negotiate in good faith to resolve outstanding issues and come to an agreement.”

Brinkmanship comes at a sensitive time for unions, railroads, shippers, consumers and President Joe Biden, who appointed an emergency executive to help break the impasse.

A White House official told Reuters that Biden has been in touch with unions and companies today to try to avert a strike, as have cabinet ministers.

U.S. railroads account for nearly 30% of freight by weight and maintain approximately 97% of the tracks Amtrak uses for commuter trains. Widespread rail disruptions could choke supplies of food and fuel, create transport chaos and increase inflation. read more

Unions, which won significant wage increases, are pushing back on work rules that would require employees to be on call and available to work most days. Railroads are struggling to rebuild employee ranks after reducing their workforce by nearly 30% over the past six years.

At noon Wednesday, Norfolk Southern will stop accepting intermodal cargo: freight that moves by combinations of ship, truck and rail. These shipments include consumer products and e-commerce packages that account for nearly half of US rail traffic.

That could worsen existing backups at East Coast ports and inland hubs, causing delays across the country as farmers prepare for harvest and retailers stock up stores for the Christmas shopping season. Bulk commodities—including food, energy, automotive and construction products—make up the rest of U.S. rail shipments.

US industry groups are pushing Congress to avert the worst-case scenario.

“A shutdown of the country’s rail services would have enormous national consequences,” the chamber said on Monday, adding that it would lead to perishable food waste, disrupt goods delivery and prevent the transport of fuel and chemicals.

The Labor Department said there have been dozens of calls from ministers and other senior administration officials to help the parties reach an agreement.

Railroads said late last week that they would halt shipments of hazardous materials such as chlorine used to purify drinking water and chemicals used in fertilizer on Monday so they are not stranded in unsafe locations if rail traffic stops. read more

On Sunday, two unions negotiating contracts said the freeze on hazardous shipments was designed to give employers leverage ahead of this week’s deadline to secure labor agreements. read more

As of Sunday, eight out of 12 unions had reached tentative agreements covering about half of 115,000 workers, the National Railway Labor Conference (NRLC) said.

Hold-outs include the transportation division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) and the Brotherhood of Locomotive Engineers and Trainmen (BLET).

There has not been a nationwide stoppage in U.S. rail service since 1992, when major freight railroads shut down operations for two days in response to an International Association of Machinists strike against CSX, saying that a strike against one railroad was a strike against all railroads.

Reporting by David Shepardson and Lisa Baertlein; Editing by Chizu Nomiyama, Jonathan Oatis and Josie Kao

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