Train wagons carrying cargo containers for shipping companies.

With a nationwide rail strike looming, the “Brotherhood of Locomotive Engineers and Trainmen” (BLET) ratified the labor agreement put forth by the Biden administration. However, members of the International Association of Sheet Metal Workers Air, Rail, and Transportation (SMART-TD) rejected it. These organizations are the largest of the twelve rail unions, representing over half of the United States’ 110,000 rail employees. So far, eight unions have approved the deal, while four have turned it down.

Contributing Factors to a Potential Rail Strike

Twin diesel locomotives with container train passing industrial and farming area at speed with some summer heat haze. A range of tree-lined hills in the background. — The “Brotherhood of Locomotive Engineers and Trainmen” (BLET) ratified the labor agreement put forth by the Biden administration.

The primary disagreement is a lack of sick days, with the unions pushing for 15 days of paid sick days. A “cooling off” period when no strikes or lockouts can occur will run through December 8, 2022, for SMART-TD. It is not known whether the Brotherhood of Maintenance of Way Employees Division (BMWED) and Brotherhood of Signalmen (BRS), will grant an extension to negotiate together with SMART-TD and the International Brotherhood of Boilermakers (IBB). While Congress has the authority to intervene by forcing an agreement, it is the position of the White House that a labor settlement hashed out at the bargaining table is preferable to a rail strike. It is likely that other unions would be unwilling to cross the picket lines of any union that walks off the job.

Potential Consequences

Railroad track and switch — In the event of a rail strike, it is likely that other unions would be unwilling to cross the picket lines of any union that walks off the job.

A nationwide rail strike would devastate an already stretched supply chain. Potential losses could be as much as $2B a day to the U.S. economy. The seven Class I railroads transport roughly 40% of long-distance freight volumes from coal, chemicals, food, consumer goods, and electronics.

Industries Impacted

Chemical manufacturers and petroleum refineries rely on rail to ship their products. Production of everything from gasoline for cars to chlorine for water treatment plants would halt. Approximately 30 percent of all packaged foods in the U.S. is moved by rail. Pork and chicken producers that rely on rail to deliver the weekly 27m bushels of corn and 11m bushels of soybean for animal feed would need to switch to trucking. A rail strike would also affect commuter traffic, as AMTRAK partly relies on tracks owned and operated by freight railroads. Retailers are also concerned about online orders, as FedEx and UPS use rail cars that hold roughly 2,000 packages in each car.