Freight Rail Strike Could Prove Devastating to the US Economy

the staff of the Ridgewood blog

Ridgewood NJ, pressure is on for railroad unions and management to reach a labor deal before a potential freight rail strike hits the U.S. in 10 days. Negotiations have been ongoing since September, but with both sides failing to reach an agreement, President Biden ordered Congress to step in before the Dec. 9 deadline.

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Eight of the 12 labor unions accepted it, but four — including the nation’s largest rail union Sheet Metal, Air, Rail Transportation (SMART-TD) which represents 28,000 employees — saw a majority of its workers vote against the deal in September. Compensation reportedly isn’t the driving factor behind the rejection — key sticking points include quality of life, scheduling, staffing levels, and lack of paid sick leave.

If an agreement is not reached by December 9, the world’s largest economy could see nearly 7,000 freight trains grind to a halt, at a cost of more than $2 billion a day, according to the American Association of Railroads.

On Monday, more than 400 groups — including the U.S. Chamber of Commerce, the National Retail Federation, and the American Farm Bureau Federation — penned a letter to Congress warning of the impacts of a strike and urged them to intervene. “The risks to our nation’s economy and communities simply make a national rail strike unacceptable,” the letter stated. “Therefore, absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow.” The letter warned that rail traffic stoppage could halt nearly 30% of U.S. cargo shipments and cost the economy up to $2 billion per day on top of worsening the current inflationary environment. It also predicted that up to 7 million travelers per day would see their rail services disrupted.