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Tuesday, December 6, 2022

Biden Adminstration Renews Calls on Unions, Railroads to Avert Rail Strike

Biden Adminstration Renews Calls on Unions, Railroads to Avert Rail Strike
© Reuters.

 

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By Geoffrey Smith 

Investing.com — The Biden Administration, on Monday, again urged railroads and labor unions to resume negotiations to avoid a national rail strike later this week, saying that would be an “unacceptable outcome for our economy and the American people.”

A rail strike, which would deal a fresh blow to domestic supply chains just as the disruptions from the coronavirus pandemic are fading, is possible as early as Friday. That’s when a mandatory ‘cooling-off’ period expires, allowing labor unions to call their members out.

Last Friday, some railroad companies threatened a lockout from next Friday, saying they would embargo certain types of shipments from that date unless unions dropped their demands.

Eight out of 12 labor unions in the industry have reached tentative agreements with employers, with three more agreements being signed in the last week. However, many of these will have little effect if two of the sector’s biggest unions, BLET and SMART-TD, continue to press for certain ‘quality of life’ clauses addressing vacation, sick days, and other attendance-related issues to be included in their new deal.

BLET and SMART-TD represent around half of the workers in the sector. Many of the other unions have so-called ‘Me Too’ clauses which would import the terms negotiated by BLET and SMART-TD largely into their own deals, giving those two organizations special importance across the sector.

Approximately 40% of the U.S.’s long-distance trade is shipped by rail, including large amounts of petroleum products and agricultural commodities. Forcing 7,000 trains to stay idle could create fresh problems for getting not only those industrial commodities but all kinds of other bulk shipments to market. Likewise, manufacturers who receive their intermediate products by rail could have to shut down if a strike were to disrupt the usual ‘just in time’ supply chain management practices.

Railroad stocks performed broadly in line with the rest of the market on Monday, with CSX (NASDAQ:CSX) rising only 0.7%, Union Pacific (NYSE:UNP) stock rising 1.1% and Norfolk Southern (NYSE:NSC) stock rising 0.6%.

Source: Investing.com

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