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US rail workers could be headed for a nationwide strike if an agreement is not reached within days, which could be a devastating blow to the economy and manufacturing. Union members voted in July to strike, seeking better quality-of-life provisions in their contracts.
These provisions center around attendance policies and vacation and sick days. This has been a major sticking point in contract negotiations that began nearly two years ago, with union members stating that attendance policies are too strict due to staffing cutbacks, and workers are unable to take time off even for family emergencies. Railroad officials are contending that these policies are necessary to ensure there are enough staff to safely operate the rail lines.
With government intervention, the strike has been delayed and negotiations have continued. Several of the unions have come to an agreement, though the largest, the Brotherhood of Locomotive Engineers and Trainmen (BLET) and SMART Transportation Division, continue to negotiate (1). The designated “cooling off period” ends on Friday, September 16th.
If the unions cannot come to an agreement within days, rail shipping could shut down nationwide. The results of this could be disastrous, costing the economy upwards of $2 billion per day. In the US, rail makes up the largest portion of long-distance trade, around 40%. Should the unions vote to strike, the supply chain could effectively come to a screeching halt.
With the strike, the chemical industry could take a massive hit to distribution, as more than 2 million railcars of chemicals travel via rail in the US each year, amounting to around 20% of chemical transportation (2). Chemicals also account for a huge chunk of income to the railroads, estimated at more than 16% of gross revenue. Rail is considered the safest method of transporting hazardous materials, making the rail shutdown a major safety issue, as alternative transportation methods could result in dangerous accidents.
Should the rail workers strike, Congress could potentially intervene, as they did in 1992 when the International Association of Machinists shut down the railways across the nation. Within two days of the shutdown, Congress passed emergency legislation that banned the strike and forced arbitration. However, even a brief shutdown could cause severe damage to the already crippled supply chain.
Emergency measures are being put into place, including halting shipments of hazardous and security-sensitive materials. Efforts are being made to move these shipments to other transportation methods and contingency plans are being put in place across the rail industry. This continues to be a fluid situation and will be one to watch in the coming days, as the impact of a strike will be felt around the country in nearly ever industry.