Railroad Strike Looms Once Again

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(Washington, DC) — The possibility of a national rail worker strike is once again on the table. In September, the Biden Administration praised a tentative deal between railroads and unions that addressed longtime disputes over pay and working conditions. However, the largest rail union in the U.S., which represents conductors, rejected the latest offer. The Biden administration warned back in September that a nationwide strike could cripple our economy. If a deal isn’t reached, a strike could take place next month.

Read more from our partners at DTN/Progressive Farmer here: https://www.dtnpf.com/agriculture/web/ag/columns/cash-market-moves/article/2022/11/21/4-rail-unions-vote-ratify-rail-now

Also, below is commentary on the issue from Mike Steenhoek who is Executive Director of the Soy Transportation Coalition:

Earlier this morning, the two largest railroad worker unions announced the results of their ratification vote on the tentative agreement that was reached on September 15th.  The Brotherhood of Locomotive Engineers and Trainmen (BLET) voted to accept the agreement by a 54% to 46% margin.  The Transportation Division of the Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) also released the results of their vote.  A small percentage of the SMART-TD union – the yardmasters – voted to accept the agreement with a 62% majority.  However, the overwhelming majority of SMART-TD members – engineers, conductors, brakemen, etc. – voted against ratification by a slim 50.87% majority.  The net result of the split decision within SMART-TD is that one more union has joined three others in not approving the tentative agreement.

All twelve of the railroad worker unions have therefore announced the results of their ratification votes.  Eight of the twelve have ratified the tentative agreement.  Four have rejected it.  A listing of the twelve unions is included below:

NAME VOTED TO RATIFY? MEMBERSHIP RESPONSIBILITIES/POSITIONS
Sheet Metal, Air, Rail, and Transportation Workers – Transportation Division (SMART-TD) No 37,400 Locomotive engineers, conductors, brakemen, etc.
Brotherhood of Locomotive Engineers and Trainmen (BLET) Yes 24,700 Locomotive engineers, conductors, brakemen, switchmen, hostlers, etc.
Brotherhood of Maintenance of Way Employees Division (BMWED) No 23,900 Builds & maintains track, bridges, buildings, etc. within the rail network
Brotherhood of Railway Carmen (BRC) Yes 9,200 Repair & inspection of rail cars
Brotherhood of Railway Signalmen (BRS) No 7,300 Installation & maintenance of railroad signals
International Association of Machinists & Aerospace Workers (IAM) District 19 Yes 6,600 Locomotive machinists, roadway mechanics, & facility maintenance
International Brotherhood of Electrical Workers (IBEW) Yes 5,800 Inspect, test, install, & maintain railroad electrical systems
Transportation Communications Union (IAM) Yes 3,800 Clerks, computer programmers, receptionists, etc.
National Conference of Fireman & Oilers (NCFO) Yes 2,400 Preparing & servicing trains
American Train Dispatchers Association (ATDA) Yes 1,500 Operation & dispatch of trains; Supply power for electric train networks
Sheet Metal, Air, Rail, and Transportation Workers – Mechanical Department (SMART Mechanical Department) Yes 1,400 Maintain & rebuild locomotives; Maintain heating, ventilation, plumbing, etc. systems at rail yards
International Brotherhood of Boilermakers (IBB) No 500 Repair & rebuild locomotives; Weld railroad tracks

 Source: National Railway Labor Conference

With its vote to reject the tentative agreement, SMART-TD must maintain status quo operations until Thursday, December 8th.  At 12:01 am (EST), on Friday, December 9th, union members could go on strike and/or the railroads could lock out workers.  Even though eight of the twelve unions have ratified the tentative agreement, the workers of all twelve unions will not cross the picket lines – even if one single union holds out and does not accept the tentative agreement.  Given that four unions have voted against ratification, concerns are clearly on the rise that a strike or lockout is in the realm of possibility.  While the BRS currently has a status quo period extending only to December 4th, it is expected that all four unions that have rejected the tentative agreement will ultimately have December 8th as the final date for negotiations.

According to the Association of American Railroads, railroads annually transport 1.5 million carloads of grain – including 340,000 carloads of soybeans.  In addition, 248,000 carloads of processed soybeans (primarily soybean meal and soybean oil) are transported each year.  691,000 carloads of corn and 305,000 carloads of wheat are annually transported by rail.  Railroads have been, and continue to be, one of the key contributors to U.S. agriculture being the most competitive supplier in the international marketplace.

Given the well-documented low water conditions along the inland waterway system, having this big question mark regarding rail service could not come at a worse time.  Rail service already has not been the lifeline it normally should be, but the potential for a strike or lockout is clearly causing much agitation in agriculture and the broader economy.

As I’ve shared before, an actual rail strike will clearly halt economic activity, but the threat of a rail strike can achieve this as well.  For industries like agriculture, the decisions made today are determining where and how soybeans and grain will be shipped next month, two months from now, etc.  Having a predictable supply chain is essential for agriculture to succeed, but this predictability is clearly impugned as we complete harvest and are in the midst of our key export window.  According to the U.S. Department of Agriculture, railroads transport 29% of soybeans, 33% of corn, and 60% of wheat to export terminals.  We certainly want both railroads and rail unions to arrive at an agreement that is beneficial to both sides, but what is critical to agriculture and many other industries is to avoid an actual – or even a threat of – a railroad strike that would add further harm.

The Soy Transportation Coalition has joined numerous agricultural and other organizations to strongly encourage Congress and the Biden Administration to intervene to ensure a railroad strike or lockout does not occur.  We will continue to do so in the days and weeks to come.

Background on negotiations:

The two parties that have been at the negotiating table are the National Carriers’ Conference Committee (NCCC) – representing the nation’s leading railroads – and a collection twelve unions representing approximately 125,000 railroad workers.

The negotiations between the two parties have been ongoing for a couple years, but have not resulted in an agreement.  On July 15th, President Biden appointed the three-member Presidential Emergency Board (PEB) to develop a set of non-binding recommendations by August 16th for the two parties to consider.  After the recommendations were released, the two parties had 30 days – concluding on September 16th – to accept the recommendations, arrive at a different agreement, or temporarily extend the current contract.  If an agreement was not reached, a strike or lockout commencing on September 16th was a possibility.  Fortunately, a tentative agreement was reached on September 15th between the NCCC and leaders of the twelve unions – temporarily averting a railroad strike.  Since September 15th, the rank and file membership of the twelve unions have voted to accept or reject the tentative agreement.

The PEB recommended a 24% wage increase for railroad workers over five years.  This compares with the railroads’ proposed 17% wage increase over five years and the unions’ proposed 31.3% increase over five years.  The PEB recommends “service recognition bonuses” of $1,000 per year for 2020 thru 2024.  The recommendations also include adjustments to health care premiums.  Much of the concerns expressed by the railroad worker unions are centered on issues related to scheduling, attendance, paid time off, sick days, etc.

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