Why are the railroad workers threatening to strike?

In September, the White House brokered a tentative agreement between rail companies and unions which included a 24% wage increase with improved health benefits. At the time, labor and management negotiators approved the deal. Now, the unions are back at the bargaining table to discuss sick leave, threatening to strike on December 9 if their demands aren’t met.

What happens if the railroads shut down?

The Association of American Railroads predicts that a shutdown will cost the economy $2 billion daily. In comparison, an estimate from Anderson Economic Group puts that number closer to $1 billion weekly. The bottom line— a strike won’t go unnoticed.

On November 28, President Joe Biden pleaded with Congress, “Let me be clear: a rail shutdown would devastate our economy. Without freight rail, many U.S. industries would shut down.” His economic advisors predict that:

• Up to 765,000 Americans could lose their jobs in the first two weeks of a shutdown
• Communities could lose access to clean drinking water without access to the chemicals needed
• Farmers and ranchers will not receive the food necessary to feed their livestock

If a strike shuts down the railroads in just over a week, the results could be catastrophic for a country already experiencing high inflation levels.

Can we avoid a shutdown?

Despite being a “proud pro-labor President,” Biden calls on Congress to “use its powers to adopt this deal.” Congress can avoid a shutdown thanks to the Railway Labor Act, enacted in 1926, which governs railroad and airline labor relations. The federal law allows Congress to adopt the agreement and avoid a shutdown.

BMWED, a rail union, says that forcing the adoption of the agreement without sick leave will “worsen supply chain issues and further sicken, infuriate, and disenfranchise railroad workers as they continue shouldering the burdens of the railroads’ mismanagement.”

How will this affect your parcel shipments?

If the strike goes forward, you may experience delays in your shipments. According to PBS, FedEx and UPS use railways to move packages, with each rail car carrying up to 2,000 packages— all of which will need to be moved by alternate methods.

Now is a great time to sign up for ShipRx’s parcel audit service. We track over 40 factors on every shipment, and if the carriers don’t deliver your parcels as guaranteed, we’ll get you the refunds you deserve. It’s free to get started, so get in touch today!

James Founding Partner