Catastrophic Rail Strike Looms

November 23, 2022

The Brotherhood of Locomotive Engineers and Trainmen (BLET) railway union voted to ratify the tentative agreement reached earlier this year; however, Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) voted to reject the agreement. With four total unions now failing to ratify the deal, a strike is increasingly possible when the status quo period ends on December 8.

RILA’s Vice President of Supply Chain Jess Dankert issued the following statement in response.

“Leading retailers’ supply chains are built on an extensive infrastructure, and rail is a major piece of that puzzle as retailers move millions of goods to consumers throughout the country. A strike would cause enormous disruption to the flow of goods nationwide, the effects of which would ripple through the supply chain and the U.S. economy at large.

“Fortunately, this year’s holiday gifts have already landed on store shelves. But an interruption to rail transportation does pose a significant challenge to getting items like perishable food products and e-commerce shipments delivered on time, and it will undoubtedly add to the inflationary pressures already hitting the U.S. economy.

“Retailers urge policymakers to use every tool at their disposal to avoid a self-inflicted economic disaster. Absent an agreement by December 9, Congress must act quickly to codify the tentative agreement reached in September to ensure rails and the larger supply chain remain functional and open for business.”

The National Retail Federation today issued the following statement from President and CEO Matthew Shay following the announcement that a fourth rail union has rejected the tentative agreement brokered by the administration among the labor unions and freight railroads.

“Millions of hardworking Americans rely on the freight rail system for their jobs and the economic security of our country. A nationwide rail strike during the peak holiday season will be devastating for American businesses, consumers and the U.S. economy.

“American businesses and families are already facing increased prices due to persistent inflation, and a rail strike will create greater inflationary pressures and will threaten business resiliency. Congress must intervene immediately to avoid a rail strike and a catastrophic shutdown of the freight rail system.

“Smooth and stable operations on the rails is absolutely crucial this holiday season and should not be derailed by a rejection of the contract. Eight of the 12 unions have ratified the agreement, while four have rejected it. The parties must work out the issues and ratify the contract without a disruption to the system. If not, Congress must step in to prevent a strike before the end of the cooling off period on December 8.”

According to a report from the Association of American Railroads, a nationwide rail shutdown could halt nearly 7,000 freight trains and cost more than $2 billion a day.