President Joe Biden of the United States said on Thursday that major U.S. railways and unions have tentatively struck an agreement on increased pay and better working conditions for employees, possibly preventing a nationwide train strike that may have affected the nation's supplies of food and gasoline.
A shutdown could halt 30% of U.S. cargo shipments by weight, boost inflation, cost the U.S. economy $2 billion per day, and unleash a cascade of transport difficulties affecting energy, agriculture, industry, and retail.
Officials from the Biden administration held labor contract negotiations Wednesday night to reach a deal with the unions representing 115,000 workers, according to Reuters.
Legal worker strikes would have been permitted if an agreement had not been reached by the Friday deadline of one minute after midnight.
US President Biden said: "It is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America's families and communities got deliveries of what has kept us going during these difficult years."
Union Pacific (UNP.N), Berkshire Hathaway's (BRKa.N) BNSF, CSX (CSX.O), Norfolk Southern (NSC.N), and Kansas City Southern, as well as a dozen unions, negotiated for more than two years. This prompted President Joe Biden to appoint an emergency board to help break the deadlock.
Shares of American railroad companies increased between 2.4% and 2.9% in the early going.
Possible Impact of Railroad Strikes
The nation's railways transport over 30% of the nation's freight. The railways are necessary for the operation of many important industries, such as oil refining, agriculture, car, and other manufacturing, as well as the importation of consumer products.
A brief walkout would have little impact, but academics warn that a strike lasting a week or more might have grave economic repercussions.
The railways halted accepting shipments of hazardous products, including fertilizer, and security-related supplies last Friday owing to strike fears. Many stopped receiving agricultural commodity shipments on Wednesday.
There is a chance that the strike would disrupt commutes across the nation. Amtrak and local commuter trains frequently use freight company-owned railroads.
Commutes could be hampered if striking engineers park their trucks in the middle of a road on Friday.
On Wednesday, Amtrak announced the cancellation of all long-distance trains beginning on Thursday and the closure of 10 more routes starting Thursday night.
Amtrak warned that further disruptions or cancellations were possible, CNN reported.
No Strikes for Now
The International Association of Machinists and Aerospace Workers (IAM) said Wednesday that nearly 5,000 members voted against the tentative agreement, per The Guardian.
On Wednesday, members of the Brotherhood of Railway Carmen and the Transportation Communications Union cast ballots to approve their respective contracts.
According to the union, IAM did agree to postpone any strikes until September 29.
The tentative agreements need to be approved by votes from employees at numerous other unions, and some have complained that the suggestions don't fully address staffing and scheduling difficulties.
Ron Kaminkow, general secretary of Train Workers United and vice-president of BLET Local 51, noted the PEB punted on pretty about every single issue, leaving people feeling sort of "kind of betrayed and kind of vacant" because of the unrest on the railroad right now.
The PEB only recommends one additional day of paid time off, according to Kaminkow, which means that many train workers get no paid time off at all.
Workers are on call year-round, making life-work balance difficult and leading to weariness, disease, job safety, and unhappiness.