One week prior to the deadline in their drawn-out labor negotiations, major US railroads issued a statement Friday saying they are now beginning preparations for a possible strike and service disruption.
BNSF, which is owned by Warren Buffet’s Berkshire Hathaway, and CSX, both said they are now taking measures to secure shipments of hazardous and security-sensitive materials, in the event a strike becomes necessary.
BNSF said in a statement to Reuters news service, “While these preparations are necessary, it does not mean that a work stoppage is inevitable.”
After more than two years of negotiations, talks between railways BNSF, Union Pacific, CSX, and unions representing 115,000 workers all reached an impasse this summer. As the unions prepared for a strike, the White House stepped in, enacting a Presidential Emergency Board that could make settlement recommendations, in an effort to break the impasse, and avoid the service disruptions of a strike which would worsen supply chain snafus and exacerbate inflationary pressures in the economy.
As a part of the White House intervention, a mandatory cooling off period went into effect, to allow negotiations to proceed in a more orderly fashion. The cooling off period expires September 16, and if no settlement is reached, it will open the door the the unions beginning strikes, as well as employer lockouts, and congressional intervention, to pressure the parties to come to an agreement.
A spokesperson for the Association of American Railroads said on Friday that talks are, “active and ongoing.”
BNSF said the remaining unions and other railroad are working, based on the Board’s recommendations, to come to agreements and avoid any potential interruptions to rail service.
On Friday, the biggest US trucking industry group issued a statement calling on Congress to be prepared to intervene to stop any railroad shutdowns, in the event negotiations fail.
Chris Spear, chief executive of the American Trucking Associations (ATA), wrote in a letter to congress, “Congress should take swift action … to avoid a debilitating and unnecessary labor disruption that could cost the country billions each day.”
During a similar situation in the early 1990s, Congress forced both sides into a binding arbitration to avert any disruptions to shipping activities.
So far, there have been agreements reached between unions and freight railroads which cover 21,000 workers that are represented by five out of the twelve total unions partaking in negotiations.
It is estimated a strike would ultimately cost the US economy $2 billion each day, and it would require bringing in 467,000 long-haul trucks to handle the stalled shipments – a number which exceeds the supply of trucks. Shortages and tight supplies of products would be inevitable, adding to inflation at a key moment as the Federal Reserve is trying to tamp it down, without tipping the economy into recession.
ATA’s Spear said, “Additional insecurity placed on the still fragile U.S. supply chain – as we recover from COVID and other supply chain stressors and move towards the holiday season – will harm the economy at large and individual Americans.”
