Railroad Strike Averted

OMAHA (DTN) -- President Joe Biden on Friday signed legislation meant to prevent railroad workers from going on strike, saying that such a strike "would have been an economic catastrophe at a very bad time in the calendar."

The legislation signing and brief comments at the White House ends a week of high-stakes drama in Washington that saw Congress immediately act in bipartisan fashion to prevent the 115,000 or so rail workers from potentially shutting down major sectors of the economy, including agriculture.

"Our nation's rail system is literally the backbone of our supply chain as you all well know, and so much we rely on is delivered by rail -- from clean water to food and gas, and every other good," Biden said before signing the bill. "A rail shutdown would have devastated our economy. Without freight rail, many U.S. industries would literally shut down."

As many as 765,000 people would have been put out of work within the first two weeks of a rail strike, Biden noted. He also nodded to agricultural risks as well. "Farms and ranches across the country would not have been able to feed their supply stock," he said.

Farm groups representing every commodity and sector were in lockstep throughout the fall as the risks of a rail strike came up repeatedly during negotiations and the 12 union votes over the deal struck in September. Biden pointed out rail workers will receive a "historic" 24% wage increase, improved health care and working conditions.

"And look, I know this bill doesn't have paid sick leave that these rail workers, and frankly every worker in America, deserves," Biden said. "But that fight isn't over. I didn't commit we were going to stop just because we couldn't get it in this bill."

The decision to block the strike forced Biden, who called himself a pro-union president, to choose the overall economy over the backing of the rail workers who were willing to strike over paid sick leave.

Biden signed the bill one day after the Senate voted 80-15 to pass the bill that included all provisions of the Presidential Emergency Board (PEB) agreement struck with the union leaders and railroads in September. The Senate, however, had voted 52-43 on a separate bill that would have given the rail workers seven days of paid sick leave. That bill had cleared the House of Representatives on Wednesday mainly with Democratic votes.

Zippy Duvall, president of the American Farm Bureau Federation, thanked the president and Congress for acting together this week to avert the strike. Duvall said farmers already face high diesel prices and low water levels that have hindered shipping on the Mississippi River.

"A rail strike would have had a devastating effect on the American economy, especially as families grapple with higher prices caused by inflation," Duvall said. "Farmers rely on trains to transport food and feed, and they also depend on the rails to bring important supplies like fertilizer back to the farm, which is why AFBF urged Congress and the president to find a solution to the rail worker impasse. Their bipartisan efforts will help ensure farmers can continue delivering food from their farms to families across the country."

Colin Woodall, CEO of the National Cattlemen's Beef Association, reiterated some of Duvall's comments.

"America's cattle producers are grateful for the bipartisan effort that prevented disruptions in critical rail service across the country," Woodall said. "A rail shutdown would have been disastrous to our supply chain, and would have interrupted the essential feed, fuel, and fertilizer shipments cattle producers need. We are pleased that this joint resolution was swiftly passed by Congress and signed into law."

Agricultural groups such as the National Grain and Feed Association highlighted that grain shipments account for roughly 15% of total railroad carloads nationally. Ethanol and petroleum groups also highlighted that 70% of ethanol -- about 395,000 carloads -- is moved by railroad as well. That doesn't even include dried distillers' grain shipments by rail.

"Shutting down the rails would have shut down our industry's ability to provide lower-cost, low-carbon ethanol and other important coproducts like distillers grains to customers here at home and across the border to Canada and Mexico," said Geoff Cooper, president and CEO of the Renewable Fuels Association. "More than 400,000 jobs across America are supported by the ethanol industry, and a long rail dispute would no doubt have put many of them at risk."

The intense national concerns over a strike came after more than two years of negotiations on a labor deal that did not include paid sick leave. Members of four of the largest unions voted to reject the deal even though members of eight other unions agreed to ratify it. A strike would have hit as early as Dec. 9, but railroads were already preparing to start scaling back shipments of hazardous materials such as fertilizer by early next week of Congress was unable to act.

Congress has voted 18 times since the late 1920s to avert national strikes that would have hindered interstate commerce. The last time Congress stepped into a rail strike, however, was 1992 and only after the workers had shut down the rail lines for two days before Congress acted.

Read more on DTN:

"4 Unions Vote Not to Ratify Rail Contract: Now What Happens?"


Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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