Tentative labor agreement brings sighs of relief

Rail industry, labor, shipper and political leaders yesterday expressed relief at the tentative agreement announced yesterday between the nation’s largest freight railroads and the unions that represent 115,000 rail workers.

Although the agreement has yet to be ratified by the unions’ membership, the tentative deal was reached just a day before a negotiation deadline was set to expire at 12:01 a.m. today. The agreement averted a potential national freight-rail strike that threatened to cripple the U.S. economy.

Railroads, labor leaders and Biden administration officials held a marathon negotiation session starting on Wednesday and concluding with the deal early Thursday morning.

The tentative agreement is "a great deal for both sides," President Joe Biden said yesterday at the White House.

"This agreement can avert the significant damage that any shutdown would have brought," Biden said, according to a readout of his remarks. "Our nation’s rail system is the backbone of our supply chain."

Under the new agreement, the workers will receive better pay — a 24% wage increase over the next five years, improved working conditions and capping the cost of what the workers will have to pay toward health-care costs.

The agreement also included certain quality-of-life provisions that the unions wanted but had been a sticking point in the negotiations. Those provisions included voluntary assigned days off for employees working in thru-freight service; one additional paid day off; the ability to take time off from work to attend doctors’ appointments; and exemptions from railroad attendance policies for hospitalizations and surgical procedures.

The tentative agreement is a win for and recognition of “tens of thousands of rail workers and for their dignity and the dignity of their work,” Biden said.

"They worked tirelessly through the pandemic to ensure that families and communities got the deliveries they needed during these difficult few years," he said.

The railroads also benefit from the agreement, the president added.

"With this agreement, railroad companies will be able to retain and recruit workers. They’ll be able to continue to operate effectively as a vital piece of our economy. They’re really the backbone of the economy," Biden said.

Officials and organizations from inside and outside the rail industry offered their congratulations — and sighs of relief — upon hearing yesterday’s announcement.

"While the vast majority of short line railroads were not part of this national bargaining round, a strike would have immediately impacted our railroads and our customers, as nearly all short line customer shipments connect with Class I carriers along their journey," said American Short Line and Regional Railroad Association President Chuck Baker in a press release.

Baker called on the rail industry to use the momentum spurred by the agreement to work together to solve the freight industry’s ongoing challenges and return the U.S. supply chain to pre-pandemic levels of efficiency and effectiveness.

"Further, we call on all parties to focus on repairing and rebuilding relationships so that future negotiations progress productively and we avoid any risk of interrupting critical freight-rail operations," Baker added.

The tentative agreement was critical for the entire rail system, including the companies that supply the industry, said Railway Supply Institute President Patty Long in a press release.

"A work stoppage would have devastating and lingering consequences for RSI members and escalate challenges related to the inflation and supply-chain disruptions currently impacting the U.S. economy. RSI applauds all parties for coming to an agreement that balances the needs of workers, businesses and the economy," Long said.