This Monday I’d like to provide an update on the rail strike situation we covered a few weeks ago. Since the impact that the railroad strike could have on the US economy is immense, providing updates to shippers is critical.
Last time we chatted about the rail strike, President Biden’s involvement resulted in the strike being delayed and there were still two unions left to ratify the agreement.
Today not much has changed, which has bred some concern amongst shippers. And rightfully so, since all 12 Unions do need to accept and ratify to ensure there will not be any interruption of the much-needed rail services across America.
This lack of conclusion approaching the Nov 19th deadline to ratify is surprising in some ways since most would agree that what the rail lines offered was generous (a 24% increase and bonus, among other things), and most of the union members liked the offer enough to quickly accept.
It appears the remaining union members (primarily engineers and maintenance workers) are still not accepting the offer because they want the rail lines to provide sick days and benefits, and a little bit of respect. That’s right, it’s a matter of perks and principles for remaining unions, and it seems some tension is still bubbling inside unions over whether holding out is the right call.
Dennis Pierce the President of the Engineer’s Union has been quoted below from a CNN article written by Chris Isidore last week:
"I think we got everything we could," Dennis Pierce, President of the Engineer’s Union, told CNN on the day the deal was reached. "And I think once our membership understands where we sit and what's in it, I think it'll ratify." (The Threat of a Freight Railroad Strike is Back, CNN Business)
For the sake of the shippers out there, I do hope Dennis is correct and the union representatives that continue to meet and negotiate to ratify the agreement ultimately find success. We know that shippers from all industries are reaching out to congress and their representatives to ensure they will keep the supply chain moving. As an example, grain producers are very concerned. With water levels low in the Mississippi already causing capacity challenges, rail is needed to provide the much-needed additional capacity. Adding a strike to grain producers right now would be quite a disaster.
So if the engineers do not ratify, shippers will need to ensure they have contingency plans in place for transloading, storage, and movement by trucks to ensure the supply chain continues to move. Wellington Group of Companies and Commtrex have solutions in place in the event our partners and customers have to adjust due to a strike. Please reach out if you are looking to assess your risk in a strike scenario, we’d be happy to help.
See you next newsletter!
Bill Robinson
Oh – and happy Diwali to all celebrating!
