Marathon Negotiations Continue as US Rail-Strike Deadline Nears

Katia Dmitrieva, Keith Laing and Lillianna Byington
·4 min read
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(Bloomberg) -- Biden administration-led talks between freight-rail companies and unions to avert a US rail system shutdown extended into early Thursday morning with no word on whether progress had been made.

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The negotiations in Washington, led by Labor Secretary Marty Walsh, continued through lunch and dinner, a Labor Department spokesperson said.

President Joe Biden, who traveled to Detroit on Wednesday, has been kept apprised of the ongoing negotiations and is following them closely, according to a White House official.

But even as both sides remained at the bargaining table, contingency plans were being drawn in the event of a strike Friday by about 125,000 freight-rail workers that estimates indicate could cost the world’s biggest economy more than $2 billion a day.

Amtrak has canceled all long-distance trains starting Thursday.

The company has already begun phased adjustments as a work stoppage could hurt passenger-rail services on the routes on which it operates on tracks owned and maintained by freight railroads, Amtrak said in a statement Wednesday. The Northeast Corridor route linking Washington, New York and Boston isn’t part of the planned shutdown, because Amtrak runs its own lines.

“We’ve been engaging with the parties and our message continues to be that the labor unions and the railroads need to find the deal space to avoid any kind of disruption,” Transportation Secretary Pete Buttigieg told reporters in Detroit. “Of course, we’re preparing for any contingency” should a strike happen, but the administration’s goal is to prevent a stoppage, he said.

The shutdown would be the largest of its kind since 1992, and snarl a wide range of goods transported by rail -- from food to metal and auto parts -- in addition to causing travel chaos.

The White House is considering an emergency decree to keep key goods flowing.

Any cancellations in passenger services are a disruption for Americans and underscore why the dispute must be resolved as soon as possible, a White House official said in response to Amtrak’s announcement. The unions and railroads are continuing to negotiate in good faith to avert a shutdown of freight-rail lines, the official added.

A Biden-appointed board last month issued a set of recommendations to resolve the dispute, including wage increases and better health coverage. But the proposal did not include terms on scheduling, attendance and other issues important to the two unions holding out for a deal, affiliates of the Teamsters Union and of the International Association of Sheet Metal, Air, Rail and Transportation Workers. Together, they represent about 60,000 employees.

They have complained that under rail companies’ punitive attendance policies, employees can be, and have been fired for getting sick or going to the doctor. The companies have said they provide paid time off that employees can use for medical appointments.

Senate Republicans failed Wednesday in a bid to force labor unions and railroads to resolve a clash over the contract negotiations after Senator Bernie Sanders, an independent from Vermont, objected, arguing freight rail workers should have better sick leave.

A growing number of industry groups are urging Congress to act to avoid a strike with the National Retail Federation saying Wednesday that lawmakers should implement the emergency board’s recommendation to avoid a “catastrophic shutdown” of the freight-rail system.

A rail strike would be “potentially disastrous,” with “dire consequences that will cascade throughout the economy if a strike actually occurs,” Business Roundtable Chief Executive Officer Joshua Bolten told reporters.

Supply-chain issues would be “geometrically magnified by the rail strike, and that’s not just the occasional Amazon box showing up two days later than it should -- these are critical materials” such as chlorine to keep water clean that would be delayed, Bolten said.

If all 7,000 long-distance freight trains available in the US stopped running, the country would need an extra 460,000 long-haul trucks daily to make up for the lost capacity, which isn’t possible because of equipment availability and driver shortages, American Trucking Associations President Chris Spear said in a letter to Congress.

The trucking industry -- dealing with labor issues of its own -- faces a deficit of 80,000 drivers nationwide, he wrote.

A majority of the 12 unions involved has either reached or finalized tentative agreements with employers, according to the National Carriers’ Conference Committee, which represents companies including BNSF Railway, CSX Corp., Kansas City Southern, Norfolk Southern Corp. and Union Pacific Corp. in collective bargaining.

However, members of those unions would refuse to work unless a deal was reached with the whole group.

Earlier, almost 5,000 workers represented by the International Association of Machinists rejected the contract, complicating efforts to avoid a nationwide strike.

The union members gave leadership the green light to strike if necessary. IAM District 19 said it also agreed to an extension until Sept. 29 to allow negotiations to continue.

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