Industry stakeholders weigh in on tentative rail labor agreement

Now that a tentative agreement between United States freight railroad carriers and railroad labor unions was reached earlier this morning, a collective sigh of relief has been expressed by myriad supply chain stakeholders and industry associations.

The Washington, D.C.-based Association of American Railroads (AAR) expressed thanks “to all unions involved in negotiations for their efforts and dedication to reaching agreements throughout this process. In addition, the industry thanks the Biden Administration, especially Secretary of Labor Marty Walsh, Secretary of Transportation Pete Buttigieg, Secretary of Agriculture Tom Vilsack, and the members and staff at the National Mediation Board, for their leadership and assistance in reaching these settlements.”

And Chuck Baker, president of the American Short Line and Regional Railroad Association (ASLRRA), said that averting a strike was paramount, as a work stoppage would have produced severe ripple effects harming the entire U.S. economy.

“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 Baker. “We are confident the agreement that was reached will ensure that rail employees will be well-compensated for the jobs they perform as members of the nation’s critical workforce, and that railroads will be able to retain and attract skilled and valued employees into the future. We appreciate not only the railroad and labor union negotiators that eventually got the deal done but also the involvement of the Biden Administration in producing the Presidential Emergency Board recommendations and helping to bring the parties together in the final hour. 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.”

The U.S. Chamber of Commerce, who was very vocal in its concerns about a deal being reached, was pleased with this outcome.

“The U.S. Chamber commends the nation’s six largest railroads, the twelve unions, and the Biden administration for reaching agreement on a new labor contract,” said U.S. Chamber of Commerce President and CEO Suzanne P. Clark. “This is the best outcome for the American public and is a testament to the hard work and willingness to compromise from both sides. Our nation was very close to a national rail shutdown this week, the effects of which were already beginning to be felt throughout the business community, and would have had devastating impacts to American families and our economy. We are glad to see a rail strike averted and hope to see future negotiations finalized in a timely manner.”

On the shipper group side, The Fertilizer Institute (TFI) also was very pleased with this development,

“Averting a strike Friday morning was priority number one,” TFI President & CEO Corey Rosenbusch said. “We appreciate the hard work both sides put into reaching a tentative agreement that will in turn allow our industry to produce and move the fertilizers our farmers rely on to feed the world. The fertilizer industry also appreciates the focused attention of President Biden, Secretary Walsh, and the Administration to reach a resolution in a challenging situation. We are hopeful that union membership will vote to approve the tentative agreement to ensure freight rail in the U.S. continues to operate. As we move forward, it is also essential that rail carriers hire and retain the appropriate employee staffing levels to support a strong economy. Staff reductions in recent years have dramatically hurt rail service and made the rail-labor contract negotiations more challenging.”

On the railroad carrier side, Norfolk Southern EVP and Chief Marketing Officer Ed Elkins wrote in a customer service alert that NS is moving immediately to resume normal operations and restore service that had been curtailed in anticipation of a potential strike.

“Our goal from the beginning has been to provide our craft railroaders with pay and benefits that keep them among the highest compensated workers in the nation,” he wrote. “We are pleased to have a path forward that accomplishes that goal and lets us get back to the work of running a customer-centric, operations-driven railroad. Although the immediate threat of a service disruption is behind us for now, we understand that our service is still not at the level you expect. Building on our recent improvements in service remains the top priority of our entire organization.”

While ratification by union membership awaits, the uncertainty over this situation hopefully is behind us. This helps to eliminate what would have been an unwelcome situation, to say the least, on our nation's railroad tracks. Even though this has appeared to reach a good outcome, it does not mean that the supply chain's problems are fixed, far from it. But, at the same time, it is one less (major) concern to worry about.