Senators’ legislation seeks to avert freight rail stoppage

A lockout by employers or strike by workers could worsen supply chain problems

A BNSF intermodal freight train travels across a crossing at Williams, Ariz., on Wednesday, July 6, 2022.  (Bill Clark/CQ Roll Call)
A BNSF intermodal freight train travels across a crossing at Williams, Ariz., on Wednesday, July 6, 2022. (Bill Clark/CQ Roll Call)
Posted September 12, 2022 at 3:52pm, Updated at 9:05pm

Sens. Richard M. Burr and Roger Wicker introduced a joint resolution Monday that would require unions and freight railroads to accept the recommendations of a presidential emergency board to avert a strike or lockout that could come as early as Friday.

The joint resolution by Burr, R-N.C., and Wicker, R-Miss., is a sign of Washington’s increasing nervousness about the disruption of a strike or lockout. Wicker and Burr said a shutdown would cost $2 billion a day in lost output.

With the economy still facing inflation running close to a 40-year high, a shutdown of freight rail would also complicate supply chain problems that arose in the COVID-19 pandemic in 2020. Two House subcommittees are scheduled to meet Thursday to take stock of the freight rail system.

Amtrak said Monday it is canceling three Tuesday departures of long-distance routes because they use freight companies' tracks, maintenance and dispatchers. "The shutdown could have an impact on all Long Distance and most of our State-Supported routes as Amtrak operates almost all of our 21,000 route miles outside the Northeast Corridor (NEC) on track owned, maintained and dispatched by freight railroads," Amtrak said in a tweet.

Wicker, the ranking member on the Senate Commerce Committee, and Burr, the ranking member on the Health, Education, Labor and Pensions Committee, raised concerns in July about the economic effects a rail strike could have on the U.S.

“A rail strike would be counterproductive for everyone involved and would have devastating impacts on our entire economy,” Wicker said in a statement Monday. “While there is still time for the remaining parties to reach voluntary agreements to end this dispute, it is time to bring this matter to a close," he added.

The emergency board proposed a 24 percent wage increase spread over several years and $1,000 annual bonuses, to be applied retroactively dating back to 2020, and an additional paid day off. Health benefits would continue with modest improvements but no reductions in benefits or cost shifting.

"The Biden Administration should reject labor unions’ bullying tactics. This resolution would provide certainty for Americans who have a right to travel and work freely across state lines,” Burr said.

The resolution, which would need approval by the Senate and House and a presidential signature, would have no effect if the parties settle by then.

More than 30 groups, including crop, livestock, dairy and food organizations, called on Congress last week to intervene. Railroads and unions face a Friday deadline, by which workers and employers could reach an agreement, decide to extend negotiations or decide no agreement can be reached.

“The U.S. rail network moves critical agricultural inputs and significant quantities of agricultural products. These essential items are transported by rail to domestic facilities and to ports for export abroad. A complete stoppage of the rail system would lead to shutdowns or slowdowns of rail-dependent facilities resulting in devastating consequences to our national and global food security,” the organizations said in a Sept. 8 letter to the chairmen and ranking members of the Senate Commerce and House Transportation and Infrastructure committees.

The groups also warned that severe disruptions in freight rail service could feed inflation.

As of Monday, the majority of unions had announced agreements with the National Carriers' Conference Committee representing BNSF, CSX, Kansas City Southern, Norfolk Southern and Union Pacific railways. Two major unions, however, the Brotherhood of Locomotive Engineers and Trainmen and the SMART Transportation Division, have reached no settlement.

The International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Department, one of the unions that reached a tentative deal with the rail carriers on Sunday, said ratification ballots will be mailed to its rail service members soon.

The House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials and the Agriculture Subcommittee on Livestock and Foreign Agriculture will examine on Thursday the potential effects on agricultural shippers of rail disruptions as well as their long-standing complaints about rail costs and service issues.

The White House has been eyeing the conflict since early summer. President Joe Biden on July 18 signed an executive order appointing a three-member emergency board after the National Mediation Board, a federal agency responsible for aiding labor talks in the railroad and aviation industries, announced in June that both sides were leaving mediation without a new contract. The mediation board declared that the dispute could “threaten substantially to interrupt interstate commerce to a degree that would deprive a section of the country of essential transportation service.”

The appointment of an emergency board extended the period during which neither side could initiate a work stoppage. The board sent the president nonbinding recommendations in August, triggering a 30-day cooling off period that ends Friday.

Rep. Donald M. Payne Jr., D-N.J., introduced legislation in August that would, among other things, update the Surface Transportation Board’s emergency powers to respond more quickly to urgent freight rail service problems, and require contracts between a railroad and a shipper to detail service standards and remedies when the standards are not met.

The bill would allow shippers that supply the rail companies with private freight cars to charge railroads late fees known as demurrage when a rail company delays return of the cars or delivers too few or too many cars. The National Grain and Feed Association is among several groups that have argued for the change as a way to encourage the railroads to be more efficient in their use of the rail cars.

Payne, as chairman of the Subcommittee on Railroads, Pipelines and Hazardous Materials, will preside over the Thursday hearing with Rep. Jim Costa, D-Calif., chairman of the Subcommittee on Livestock and Foreign Agriculture. Costa, Agriculture Chairman David Scott, D-Ga., and Transportation and Infrastructure Chair Peter A. DeFazio, D-Ore., are original co-sponsors of Payne’s bill.