US railroad strike averted in Biden administration-brokered deal

WASHINGTON, Sept 15 (Reuters) – Major U.S. railroads and unions reached a tentative deal on Thursday after 20 hours of intense talks brokered by President Joe Biden’s administration to avoid a rail shutdown that could have affected the food and fuel supply across the country and beyond.

If they accept the deal announced at around 5 a.m. (0900 GMT), workers whose wages have been frozen will receive double-digit increases and be allowed to seek certain types of medical care without fear of punishment, union leaders said. The deal includes an immediate 14.1% wage increase, the railroads said.

Biden, who planned to greet federal negotiators before speaking on the deal, said in a written statement that the deal was “a victory for tens of thousands of railroad workers who have worked tirelessly during the pandemic to ensure May American families and communities receive deliveries of what has sustained us through these difficult years.”

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The unions, whose members bitterly rejected previous proposals, will now vote on the deal. Even if those votes fail, a rail strike that could have occurred as early as 12:1 a.m. Friday was averted for several weeks because of the standard language included in such an agreement, a person familiar with the negotiations said.

Biden’s Labor Secretary Marty Walsh hosted contract talks in Washington that lasted 20 straight hours between unions representing 115,000 workers and railroads, including Union Pacific (UNP.N)BNSF, CSX (CSX.O)South Norfolk (NSC.N) and Kansas City South.

Officials are expected to hold a press conference later Thursday.

Failure to reach an agreement by the deadline would have paved the way for workers to strike legally.

A rail transportation shutdown could have frozen nearly 30% of U.S. freight shipments by weight, fueled inflation, cost the U.S. economy up to $2 billion a day, and triggered a cascade of transportation problems affecting US energy, agriculture, manufacturing, healthcare and retail sectors. .

Railroad stocks pared early premarket gains after mixed economic data, with Union Pacific up 1.9% in post-market trade and CSX down 2.3%. Read more

U.S. natural gas futures fell about 8% after climbing 10% in the previous session. Investors expected a railroad strike to threaten coal supplies to power plants and boost gas demand.

Amtrak, which runs passenger rail, said it would resume normal service on Friday after canceling long-distance trains ahead of a strike. Read more

The impact of a shutdown would have extended beyond US borders, as the trains connect the United States to Canada and Mexico and provide vital connections to massive ships carrying goods from around the world.

Negotiations between the companies and a dozen unions lasted more than two years, leading Biden to appoint an emergency board in July to help break the impasse. Biden personally called Walsh and negotiators Wednesday night to push them toward a deal, telling them “once again to recognize the harm” a shutdown would have on families, farmers and businesses, according to a person familiar with the news. negotiations.

National Retail Federation CEO Matthew Shay thanked the Biden administration for its intervention, adding in a statement that his group was “relieved and cautiously optimistic.” Emily Skor, CEO of biofuels trading group Growth Energy, also welcomed the deal and noted that much of the country’s ethanol moves by rail.

Freight railways had halted the transport of dangerous goods, including chlorine for water purification and ammonia for fertilizers, as well as shipments of refrigerated foods and other goods using rail and au least one other mode of transportation. Their goal was to prevent shipments from being stuck in dangerous places.


The rail industry has cut nearly 30% of its workforce over the past six years, cutting wages and other costs while increasing profits, share buybacks and dividends for investors. Billionaire Warren Buffett’s Berkshire Hathaway earnings, (BRKa.N) which owns BNSF, rose 9.2% in the last quarter to $1.7 billion.

The number of American railroad workers has fallen from more than 600,000 in 1970 to about 150,000 in 2022, according to the Bureau of Labor Statistics, due to technology and cost reduction. The result is that many industrial workers are on call at all hours, waiting to respond on short notice to work for days at a stretch.

The latest agreement follows some earlier recommendations from the president’s emergency mediators. It includes a 24% salary increase over a five-year period from 2020 to 2024 as well as lump sum payments of $1,000 per five-year period.

Biden, who has called himself the most union-friendly president in history and has attacked corporations for raking in “excessive” profits, hailed a deal he said would give workers “better pay, better working conditions and peace of mind regarding their health costs.”

The president is not yet off the hook when it comes to labor issues in the supply chain. Some 22,000 unionized workers at 29 West Coast ports, which handle nearly 40% of U.S. imports, are also in high-stakes contract negotiations.

Administration officials wanted the differences resolved before November’s midterm elections that will determine whether Biden’s fellow Democrats retain control of Congress.

Top congressional leaders had threatened to pass legislation imposing a resolution on the railroads and unions if negotiations were unsuccessful. U.S. House Speaker Nancy Pelosi welcomed the tentative agreement and said Congress was “ready to act” but “fortunately that action may not be necessary.”

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Reporting by Trevor Hunnicutt in Washington; Additional reporting by Lisa Baertlein in Los Angeles, David Shepardson and Susan Heavey in Washington, Stephanie Kelly in New York, Jahnavi Nidumolu, Aishwarya Nair, Bansari Mayur Kamdar and Kannaki Deka in Bengaluru; Editing by Heather Timmons and Catherine Evans

Our standards: The Thomson Reuters Trust Principles.

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