Market News & Headlines >> Threat of Rail Strike Grows on Union Votes
Members of the nation’s two largest railway unions on Monday held conflicting votes on a key labor pact, boosting the risk of a national freight rail strike in two weeks.
The Brotherhood of Locomotive Engineers and Trainmen, the nation’s second largest rail union, approved the landmark agreement, but the SMART-Transportation Division, the nation’s largest rail union, which represents conductors, rejected it. Both unions had reached tentative deals brokered by the White House in September in a marathon negotiating session just hours before their earlier strike deadlines.
The results boost the potential for a strike when a labor peace agreement ends Dec. 9. Four unions have now voted down the tentative deal while seven have approved it, but a strike could follow if even one of them walks off the job.
Monday’s results put pressure on union leaders to reach a better deal but could also spur Congress to step in and impose a labor agreement against unions’ will. Freight railroads move about 40% of the nation’s long-distance cargo and even a short strike could cause new supply chain disruptions ahead of Christmas.
The U.S. economy would lose $2 billion each day railroad workers are on strike, the American Association of Railroads has estimated. The country’s economic output averages around $63 billion each day. A rail strike could have a major impact on U.S. agriculture as it would significantly impact movement of grains, ethanol and fertilizer among other things.
The National Grain and Feed Association (NGFA) and 192 other members of the Agricultural Transportation Working Group earlier this month urged Congress to prepare to prevent a rail strike or lockout, which would “lead to shutdowns of rail-dependent facilities resulting in devastating consequences to our national and global food security.”
“Congressional action will be necessary if the parties fail to reach agreement,” stated the food and agriculture groups in a Nov. 3 letter to House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Chuck Schumer, D-N.Y., Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader Kevin McCarthy, R-Calif.
A rail strike would come at an especially poor time for U.S. agriculture, with barge traffic on the U.S. river system already being disrupted by low water levels.