Current Affairs
September 15, 2022
Railroad Update
Railroads And Unions Reach “Tentative Agreement” To Avert Rail Strike
by Tyler Durden
Thursday, Sep 15, 2022 – 06:31 AM
Update (0751ET):
WSJ noted the White House didn’t provide details of the tentative agreement between freight rail companies and unions.
The latest headlines show the tentative agreement goes back to unions for a vote:
- RAIL PARTIES AGREE TO COOLING OFF PERIOD AS PART OF DEAL, A STANDARD PART OF RATIFICATION PROCESS IN CASE VOTE FAILS IN ORDER TO AVERT ANY SHUTDOWN -SOURCE
- TENTATIVE U.S. RAIL DEAL GOES BACK TO UNIONS FOR A VOTE -SOURCE FAMILIAR WITH THE SITUATION
Some more good news is Amtrak “is working quickly to restore canceled long-distance trains” following the announcement of the tentative deal this morning, avoiding a rail strike Friday.
* * *
A rail stoppage that threatened to unleash widespread economic damage by snarling critical supply chains appears to have been averted after freight rail companies and union leaders reached a tentative agreement.
“Following 20 consecutive hours of negotiations at the Department of Labor, rail companies and union negotiators came to a tentative agreement that balances the needs of workers, businesses, and our nation’s economy,” according to a Labor Department statement Thursday morning.
It was a “hard-fought, mutually beneficial deal,” the statement said. “Our rail system is integral to our supply chain, and a disruption would have had catastrophic impacts on industries, travelers, and families across the country.”
President Biden commented on the agreement between railroads and unions:
“The tentative agreement reached tonight is an important win for our economy and the American people.”
A White House statement said:
“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned. The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”
The breakthrough tentative agreement was announced one day before more than 100,000 rail workers were set to strike. Even though most rail unions already agreed on labor contracts, multiple unions holding out represented a large swath of rail workers. Such a disruption would’ve cost the US economy $2 billion per day, shuttering about 30% of domestic freight traffic and stoking inflationary pressures.
Railroad companies are moving higher premarket on the news.
Norfolk Southern is up 1.5%, with shares in Union Pacific surging nearly 5%. CSX is up about 2%.
https://www.zerohedge.com/markets/railroads-and-unions-reach-tentative-agreement-avert-rail-strike
September 15, 2022
Railroad Update
Railroads And Unions Reach “Tentative Agreement” To Avert Rail Strike
by Tyler Durden
Thursday, Sep 15, 2022 – 06:31 AM
Update (0751ET):
WSJ noted the White House didn’t provide details of the tentative agreement between freight rail companies and unions.
The latest headlines show the tentative agreement goes back to unions for a vote:
- RAIL PARTIES AGREE TO COOLING OFF PERIOD AS PART OF DEAL, A STANDARD PART OF RATIFICATION PROCESS IN CASE VOTE FAILS IN ORDER TO AVERT ANY SHUTDOWN -SOURCE
- TENTATIVE U.S. RAIL DEAL GOES BACK TO UNIONS FOR A VOTE -SOURCE FAMILIAR WITH THE SITUATION
Some more good news is Amtrak “is working quickly to restore canceled long-distance trains” following the announcement of the tentative deal this morning, avoiding a rail strike Friday.
* * *
A rail stoppage that threatened to unleash widespread economic damage by snarling critical supply chains appears to have been averted after freight rail companies and union leaders reached a tentative agreement.
“Following 20 consecutive hours of negotiations at the Department of Labor, rail companies and union negotiators came to a tentative agreement that balances the needs of workers, businesses, and our nation’s economy,” according to a Labor Department statement Thursday morning.
It was a “hard-fought, mutually beneficial deal,” the statement said. “Our rail system is integral to our supply chain, and a disruption would have had catastrophic impacts on industries, travelers, and families across the country.”
President Biden commented on the agreement between railroads and unions:
“The tentative agreement reached tonight is an important win for our economy and the American people.”
A White House statement said:
“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned. The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”
The breakthrough tentative agreement was announced one day before more than 100,000 rail workers were set to strike. Even though most rail unions already agreed on labor contracts, multiple unions holding out represented a large swath of rail workers. Such a disruption would’ve cost the US economy $2 billion per day, shuttering about 30% of domestic freight traffic and stoking inflationary pressures.
Railroad companies are moving higher premarket on the news.
Norfolk Southern is up 1.5%, with shares in Union Pacific surging nearly 5%. CSX is up about 2%.
https://www.zerohedge.com/markets/railroads-and-unions-reach-tentative-agreement-avert-rail-strike
September 13, 2022
Rail Deals Lining Up
Three More Unions Reach Tentative Agreements With Freight Railroads
by Tyler Durden
Monday, Sep 12, 2022 – 05:40 PM
By Noi Mahoney of FreightWaves
Three more railroad unions have reached tentative agreements with U.S. freight railroads on a new labor contract, announced the National Carriers’ Conference Committee (NCCC).
The tentative agreements announced Sunday include the Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters; the International Brotherhood of Boilermakers; and the International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Department.
“The tentative agreements … include a 24% wage increase during the five-year period from 2020 to 2024 — with a 14.1% wage increase effective immediately — and five annual $1,000 lump sum payments. Portions of the wage increases and lump sum payments are retroactive and will be paid out promptly upon ratification of the agreements by the unions’ membership,” said the NCCC, the group representing Class I railroads in the contract negotiations.
The tentative agreement also adds an additional paid day off that can be used as a personal day, vacation day or on the employee’s birthday.
The three unions represent more than 86,000 freight rail employees. Eight unions have accepted tentative deals they will be taking to their members for ratification. Altogether, there are over 140,000 employees at the bargaining table employed by the U.S. operations of Class I railroads.
A new labor deal has been in the works since January 2020, but the negotiations had failed to progress. A federal mediation board took up the negotiations but released the parties from those efforts earlier this summer.
Per the Railway Labor Act, the remaining unions would be able to legally stage a work stoppage or strike after a cooling-off period ends Sept. 16.
Unions respond to potential hazardous shipments embargo
The heads of two rail unions said Sunday that the freight railroads’ decision to begin delaying shipments of security-sensitive and hazardous material ahead of this week’s looming strike deadline is only an attempt to get shippers to increase pressure on Congress to intervene and block a work stoppage.
Several major Class I railroads said Friday they would begin curtailing shipments of hazardous materials and other chemicals in the event loads could be left unattended on a rail network. A strike or lockout is not allowed until Friday.
“This completely unnecessary attack on rail shippers by these highly profitable Class I railroads is no more than corporate extortion,” the heads of the unions that represent engineers and conductors — Jeremy Ferguson, president of the Sheet Metal, Air, Rail and Transportation Workers-Transportation Division union, and Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen union — said in a joint statement.
“Our unions remain at the bargaining table and have given the rail carriers a proposal that we would be willing to submit to our members for ratification, but it is the rail carriers that refuse to reach an acceptable agreement. In fact, it was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our unions, but they cannot legally lock out our members until the end of the cooling-off period. Instead, they are locking out their customers beginning on Monday and further harming the supply chain in an effort to provoke congressional action.”
https://www.zerohedge.com/economics/three-more-unions-reach-tentative-agreements-freight-railroads
September 13, 2022
Rail Deals Lining Up
Three More Unions Reach Tentative Agreements With Freight Railroads
by Tyler Durden
Monday, Sep 12, 2022 – 05:40 PM
By Noi Mahoney of FreightWaves
Three more railroad unions have reached tentative agreements with U.S. freight railroads on a new labor contract, announced the National Carriers’ Conference Committee (NCCC).
The tentative agreements announced Sunday include the Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters; the International Brotherhood of Boilermakers; and the International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Department.
“The tentative agreements … include a 24% wage increase during the five-year period from 2020 to 2024 — with a 14.1% wage increase effective immediately — and five annual $1,000 lump sum payments. Portions of the wage increases and lump sum payments are retroactive and will be paid out promptly upon ratification of the agreements by the unions’ membership,” said the NCCC, the group representing Class I railroads in the contract negotiations.
The tentative agreement also adds an additional paid day off that can be used as a personal day, vacation day or on the employee’s birthday.
The three unions represent more than 86,000 freight rail employees. Eight unions have accepted tentative deals they will be taking to their members for ratification. Altogether, there are over 140,000 employees at the bargaining table employed by the U.S. operations of Class I railroads.
A new labor deal has been in the works since January 2020, but the negotiations had failed to progress. A federal mediation board took up the negotiations but released the parties from those efforts earlier this summer.
Per the Railway Labor Act, the remaining unions would be able to legally stage a work stoppage or strike after a cooling-off period ends Sept. 16.
Unions respond to potential hazardous shipments embargo
The heads of two rail unions said Sunday that the freight railroads’ decision to begin delaying shipments of security-sensitive and hazardous material ahead of this week’s looming strike deadline is only an attempt to get shippers to increase pressure on Congress to intervene and block a work stoppage.
Several major Class I railroads said Friday they would begin curtailing shipments of hazardous materials and other chemicals in the event loads could be left unattended on a rail network. A strike or lockout is not allowed until Friday.
“This completely unnecessary attack on rail shippers by these highly profitable Class I railroads is no more than corporate extortion,” the heads of the unions that represent engineers and conductors — Jeremy Ferguson, president of the Sheet Metal, Air, Rail and Transportation Workers-Transportation Division union, and Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen union — said in a joint statement.
“Our unions remain at the bargaining table and have given the rail carriers a proposal that we would be willing to submit to our members for ratification, but it is the rail carriers that refuse to reach an acceptable agreement. In fact, it was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our unions, but they cannot legally lock out our members until the end of the cooling-off period. Instead, they are locking out their customers beginning on Monday and further harming the supply chain in an effort to provoke congressional action.”
https://www.zerohedge.com/economics/three-more-unions-reach-tentative-agreements-freight-railroads
September 12, 2022
Potential Rail Strike
US Railroads Enact “Contingency Plans,” Preparing For Labor Strike As Union Talks Fail
by Tyler Durden
Monday, Sep 12, 2022 – 08:45 AM
Railroads and labor unions worked through the weekend to make a deal. There were little signs of progress, and rail companies are now taking steps Monday to secure shipments of hazardous and security-sensitive materials “in light of the possibility of a rail labor strike,” the Association of American Railroads (AAR) wrote in a statement.
On Sunday, Norfolk Southern released a statement detailing it had “begun enacting its contingency plans for a controlled shut down of our network at 00:01 on Friday, Sept. 16.” The railroad said two labor unions are holding out on new contracts, “we still do not have a commitment not to strike and must act accordingly,” adding, “Our goal is to ensure that in the event of a work stoppage, crews, equipment, and freight safely reach their destinations with minimal disruption.”
Union Pacific and CSX also announced contingency plans for a possible work stoppage. BNSF told customers to call Congress so lawmakers on Capitol Hill can “intervene to prevent or quickly resolve the service disruption” if a labor strike materializes on Friday. The railroad also said: “We will begin to take steps to manage and secure the shipments of hazardous and security-sensitive materials as early as Monday.”
Rail freight networks are the arteries of the US economy.
Two months ago, the Biden administration imposed a two-month cooling-off period is set to expire at 12:01 am ET on Sept. 16 — after that — President Biden didn’t have the power to prevent a strike among two labor unions that had yet hammered out a deal with railroads. Only Congress can intervene after the cooling period expires.
Bloomberg said the two unions include the Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal Air, Rail and Transportation Workers, accounting for more than 90,000 rail employees. Ten of the other unions have already struck a deal with railroads.
Association of American Railroads warned that a railroad strike could cost the US economy upwards of $2 billion per day, while disruption wouldn’t be good optics for the Biden administration ahead of the midterm elections in November.
Bloomberg Intelligence analyst Lee Klaskow pointed out that BNSF and Union Pacific account for 45% of Class I intermodal traffic, while CSX and Norfolk Southern has 31%.
According to government data, about 29% of all US freight moves on the rails. Half the cargo is bulk commodities, such as energy, food, chemicals, metals, and wood productions — the other half is shipping containers of consumer goods.
“Even a temporary interruption would create a devastating ripple effect” across US supply chains, American Bakers Association, a Washington-based trade group representing more than 300 companies, warned.
Even if there’s no strike, rail networks are already clogged. Shipping line Maersk recently suspended import bookings through Fort Worth, Texas, due to “severe congestion” in railyards.
Railroads are preparing for possible work stoppages at the end of the week if the two unions can’t formulate a deal. There’s the possibility Congress could intervene before the cooling period expires. If not, then expect a flare-up in snarled supply chains.
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