How a railroad strike could send food prices soaring

[Auburn85 432]

https://thehill.com/policy/3636564-how-a-railroad-strike-could-send-food-prices-soaring/

 

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The nation’s supply of food could take a hit if railroad workers go on strike, driving up prices at the grocery store and limiting U.S. grain exports to countries facing famine.  

As soon as next week, 115,000 freight rail workers could walk out if they cannot reach a new contract with railroads, potentially shutting down the national rail network that transports 20 percent of all grain shipments.

While unions say they want to avert a strike, and Congress has the power to block it, the U.S. food sector is rattled by the prospect of a national railroad shutdown in the middle of peak harvest season.    

A ‘devastating ripple effect’ 

Even a short-lived interruption “would create a devastating ripple effect” on the nation’s fragile supply chains, said Lee Sanders, senior vice president of government relations and public affairs at the American Bakers Association.  

“Rail-dependent facilities would be unable to receive materials and ingredients, and millions of Americans a day would be unable to receive the baked goods they rely on to feed themselves, their families, and communities,” she said.  

A railroad shutdown in mid-September would quickly overwhelm grain storage facilities, leaving farmers with few options to store their crops and boosting the chance of spoilage. Many grain processors would shut down, raising the price of bread and other common items, while farmers would be saddled with huge crop quantities and lower commodity prices.  

“It’s kind of a double whammy when you hit both the beginning and the end of the supply chain,” said Max Fisher, chief economist at the National Grain and Feed Association. 

Freight railroads also carry roughly half of fertilizer, and farmers can’t afford delays, according to a Wednesday letter to congressional leaders from The Fertilizer Institute. 

“If farmers do not receive fertilizer, it results in lower crop yields, higher food prices, and more inflation for consumers,” Corey Rosenbusch, the group’s CEO, told lawmakers.  

Soaring food costs — which agricultural groups blame partially on existing railroad disruptions — have hit American families particularly hard. Grocery prices rose 13.1 percent over the last year ending in July, the largest annual increase in more than four decades, according to Labor Department data.  

There typically isn’t a backup plan for crops that are transported by rail, particularly when the trucking industry is already struggling to keep pace with demand. The same goes for coal, crude oil, steel, lumber, car parts and other items frequently loaded onto freight trains.

A nationwide railroad work stoppage would cost the U.S. economy more than $2 billion per day and cause shipping containers to stack up at ports, according to estimates from the Association of American Railroads. 

Grain exports and global food security 

Because roughly one-third of U.S. grain exports travel by rail, a work stoppage would also cut down on America’s ability to ship food to foreign nations, particularly those in East Africa and the Middle East that face a risk of famine following Russia’s invasion of Ukraine.  

A coalition of food and agricultural groups, including the American Farm Bureau Federation, urged lawmakers on Thursday to block a freight rail strike, warning that it would have “devastating consequences” for global food security.  

“Congress must be willing to act to ensure our farmers and ranchers can continue to help feed the world,” the groups wrote in a letter to the top lawmakers on transportation committees.  

The United Nations estimates that the number of people facing acute food insecurity has risen from 145 million to 345 million since 2019, and 50 million people in 45 countries are nearing famine.  

Russia blocked off Ukraine’s access to the Black Sea at the onset of the invasion, cutting off nations that rely on Ukraine to provide large shipments of grain and cooking oil. 

The warring countries signed a deal to open up Black Sea shipments in July, but Russian President Vladimir Putin on Wednesday criticized the agreement, prompting fears that he could abandon it entirely. 

What lies ahead  

U.S. rail workers could legally strike as soon as Sept. 16 after the White House-appointed Presidential Emergency Board (PEB) released recommendations last month meant to bring railroads and unions closer to a deal. 

Five unions have reached tentative agreements with railroads on a new contract based on the PEB recommendations, which call for 24 percent raises over five years and back pay but don’t address workers’ concerns about grueling hours and limited time off. 

The bulk of rail workers belong to unions that haven’t struck a deal. And a recent online survey from grassroots group Railroad Workers United found that more than 9 in 10 railroad workers would vote to reject the PEB recommendations and go on strike.  

If workers vote for a strike, Congress would likely intervene to block it. They could then vote to fast-track a new contract. Railroads, retailers, growers and other industries are largely urging lawmakers to simply implement the terms laid out by the PEB.  

Still, some business groups are worried about the prospect of a slow congressional response to a rail walkout, driven either by lawmakers’ inexperience with the issue or political games ahead of the midterms. 

The Biden administration, eager to avoid more economic disruption just before November, is pushing unions and railroads to secure an agreement before the issue comes before Congress. Labor Secretary Marty Walsh joined a negotiation session Wednesday before the National Mediation Board.  

“We are confident the parties will make every effort to negotiate in good faith toward a mutually acceptable solution, and we urge both sides to do so promptly,” a White House official said in an email. 

 

 

[Auburn85 432]

https://abcnews.go.com/Business/looming-railroad-strike-cripple-us-economy-transportation/story?id=89587287

 

 

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Looming railroad strike could cripple US economy, transportation

 

A major railroad strike is looming that could paralyze the nation's supply chain and transportation rail service if both sides don't come to an agreement by the end of the week.

Unions said workers are seeking improvements to working conditions, accusing rail companies of penalizing workers for taking time off for medical reasons. The unions said rail companies are jeopardizing the nation's economy to force a deal.

The National Carriers' Conference Committee (NCCC), which represents the nation's freight railroads in national collective bargaining, said rail employees are provided "significant" time off and that the companies have offered a fair contract that includes a significant wage increase.

While 9 unions have reached tentative agreements, ongoing negotiations with two holdouts could lead to a strike as early as 12:01 a.m. on Friday, as the cooling-off period under the Railway Labor Act ends and strikes become legal.

Labor Secretary Marty Walsh is meeting with rail company officials and union leaders on Wednesday to help them reach an agreement, White House press secretary Karine Jean-Pierre said on Wednesday.

The two holdout unions — the Brotherhood of Locomotive Engineers Trainmen, or BLET, and the SMART Transportation Division, or SMART-TD, represent 57,000 engineers and conductors, who make up roughly half of all rail workers.

Approximately 4,900 rail workers with a third holdout union -- the International Association of Machinists and Aerospace Workers (IAM) District 19 -- turned down a deal with the NCCC and will strike in two weeks should an agreement not be reached with rail companies, the union said Wednesday.

"The artery of the US economy is the rail system. It's one of the ways we get everything around. One third of everything gets around this way. And when you cut it, you have a stroke," Diane Swonk, chief economist at global tax firm KPMG, said in an interview with ABC News.

A potential strike could lead to $2 billion a day in lost economic output, according to the Association of American Railroads, which lobbies on behalf of rail companies. Freight railroads are responsible for carrying 40% of the nation's long-haul freight and a work stoppage could jeopardize these shipments.

"The railroads are using shippers, consumers and the supply chain of our nation as pawns in an effort to get our Unions to cave into their contract demands knowing that our members would never accept them," BLET and SMART-TD said in a joint statement on Sunday.

The NCCC urged the unions to accept a deal.

"It is critical that the remaining unions promptly reach agreements that provide pay increases to employees and prevent rail service disruptions," the NCCC said in a statement on Tuesday.

The potential impact for Americans

Should a strike happen, Americans will feel the effects in their wallets, Swonk said.

"It means everything from the potential for layoffs -- at the same time that prices are going to continue to rise and you're going to see more empty shelves in your store," Swonk said.

Rail is critical to the entire goods side of the economy, including manufacturing, warehousing, retail and agriculture. According to economist Mark Zandi, if there is a rail strike of more than three to four weeks, prices of goods, which have come down from a June peak as supply chain stresses ease and help to bring down inflation, would likely jump again, further exacerbating inflation.

"We already have an economy that's slowing and inflation that's persistently high -- that's a bad situation to be in. To add this extra layer where we could see an acceleration in some prices and an inability to get some goods entirely because they're no longer available, that's a very, very bad place to be," Swonk said.

In recent days, urgent calls for a resolution have come from trade groups representing manufacturers, retailers, oil companies and even beer sellers.

Amtrak announced Wednesday it will cancel all long-distance trains starting Thursday, as the negotiations continue and the Friday deadline to avoid a strike nears.

While Amtrak and its workforce are not involved in negotiations, it had already begun "phased adjustments" to its service in preparation for a possible freight rail service interruption.

The company said such an interruption "could significantly impact intercity passenger rail service."

Talks between unions and rail companies ongoing

Unions still at the table are continuing to call for better time-off policies for their workers. And as the Friday deadline looms, government officials are stepping in.

The railroad companies routinely penalize workers for taking time off for sickness or a doctor's appointment, BLET and SMART-TD said in a statement on Sunday.

"No working-class American should be treated with this level of harassment in the workplace for simply becoming ill or going to a routine medical visit," the unions said.

The unions said these policies have forced "thousands of employees" out of the industry and make it "impossible" to recruit new workers.

A presidential emergency board, assembled last month by the Biden administration, issued recommendations for a compromise between the unions and rail companies. The recommendations included a 24% raise from 2020 to 2024 and bonus increases, but they omitted the union's demand for a new time-off policy.

"Rail employees are provided with significant time off," the NCCC says on its website. "The unions proposed that the PEB recommend additional paid sick time, and the operating craft unions also proposed that the railroads' existing attendance policies be voided until new ones that must be negotiated with the unions can be reached."

"The PEB, however, recognized that the railroads' rights to unilaterally establish and modify reasonable attendance policies has been acknowledged for years," the NCCC said.

The IAM District 19 union, which rejected a tentative agreement with the NCCC, agreed to push its strike to Sept 29 "out of respect for other unions in the ratification process."

President Joe Biden called both union and rail company officials Monday, Jean-Pierre said.

"We have made crystal clear to the interested parties the harm that American families and businesses and farmers and communities would experience if they were not to reach a resolution," Jean-Pierre told reporters.

A Department of Labor spokesperson said, "Secretary Walsh continues to lead discussions at the Department of Labor between the rail companies and unions. The parties are negotiating in good faith and have committed to staying at the table today."

House Democrats on Wednesday expressed cautious optimism that negotiators will reach agreement to prevent a nationwide railway strike.

House Speaker Nancy Pelosi told reporters that members of Congress and the White House are heavily involved in the talks and attributed the current disagreement with unions to the lack of sick leave for railway workers.

But she and other Democratic leaders stopped short of calling for Congress to pass a bill -- they want the negotiations to work themselves out.

Republican Sens. Roger Wicker of Mississippi and Richard Burr of North Carolina introduced a resolution Monday that would end any potential strike and impose the recommendations of the PEB.

ABC News' Molly Nagle, Zunaira Zaki and Trish Turner contributed to this report.

 

 

[Auburn85 432]

 

[I_M4_AU 7,853]

What is in the new railroad contract?

 

 

The Association of American Railroads, an industry group, said in a statement that new contracts would include a 24 percent increase in wages in the five years from 2020 through 2024. There would also be a payout of $11,000, on average, when the agreement is ratified, the association said

 

This sounds like a sweet heart deal.  Who gets a 24% raise in two years?  And a $11,000 payout?  Did Biden negotiate this for the union?   It doesn't seem a CEO would ever accept something like this unless forced to.

[TexasTiger 12,947]

17 minutes ago, I_M4_AU said:

What is in the new railroad contract?

 

 

The Association of American Railroads, an industry group, said in a statement that new contracts would include a 24 percent increase in wages in the five years from 2020 through 2024. There would also be a payout of $11,000, on average, when the agreement is ratified, the association said

 

This sounds like a sweet heart deal.  Who gets a 24% raise in two years?  And a $11,000 payout?  Did Biden negotiate this for the union?   It doesn't seem a CEO would ever accept something like this unless forced to.

2024 minus 2020 = 2 years🧐?

They’re getting a 14% raise immediately. In other words, they’re breaking even— for now:

 

[Leftfield 2,608]

8 minutes ago, I_M4_AU said:

What is in the new railroad contract?

 

 

The Association of American Railroads, an industry group, said in a statement that new contracts would include a 24 percent increase in wages in the five years from 2020 through 2024. There would also be a payout of $11,000, on average, when the agreement is ratified, the association said

 

This sounds like a sweet heart deal.  Who gets a 24% raise in two years?  And a $11,000 payout?  Did Biden negotiate this for the union?   It doesn't seem a CEO would ever accept something like this unless forced to.

Lol....anything to avoid giving credit, right?

[I_M4_AU 7,853]

21 minutes ago, TexasTiger said:

2024 minus 2020 = 2 years🧐?

It basically retroactive to 2020, so they are getting 14% now for the past 2 years and 10% from now to 2024, which is 24% in 2 years.  You can figure that out.  Of course, don’t forget the $11,000 payout.

[I_M4_AU 7,853]

24 minutes ago, Leftfield said:

Lol....anything to avoid giving credit, right?

Credit, credit for what?  We’re going to be paying a lot more for shipping by rail during a recession.

[TexasTiger 12,947]

14 minutes ago, I_M4_AU said:

It basically retroactive to 2020, so they are getting 14% now for the past 2 years and 10% from now to 2024, which is 24% in 2 years.  You can figure that out.  Of course, don’t forget the $11,000 payout.

The “payout” is the inflation pacing adjustment.

[TexasTiger 12,947]

44 minutes ago, I_M4_AU said:

Credit, credit for what?  We’re going to be paying a lot more for shipping by rail during a recession.

“Stop the strike! Make ‘em work! But don’t you dare pay ‘em enough to break even!” You’re the perfect Republican. Man of the people!

[TexasTiger 12,947]

50 minutes ago, I_M4_AU said:

It basically retroactive to 2020, so they are getting 14% now for the past 2 years and 10% from now to 2024, which is 24% in 2 years.  You can figure that out.  Of course, don’t forget the $11,000 payout.

I figured it out. I was being sarcastic. 

[Leftfield 2,608]

1 hour ago, I_M4_AU said:

Credit, credit for what?  We’re going to be paying a lot more for shipping by rail during a recession.

Yet not as much more as we would if everything shut down. If we could even get it.

As I said, anything to avoid giving credit, right?

[autigeremt 6,643]

I grew up in a union house and I support what was done here. Corporate America needs to re-examine their actions from time to time. Unfortunately it takes a strike or two every now then. 

[TitanTiger 20,499]

 

Just to give you an idea of what was happening, see below.  This wasn't greedy workers trying to inflate their value to a company and costing all of us.  This is a company that's insanely profitable by any measure that simply didn't want to share much of the spoils of success with the average worker on the ground making it happen.  Here's a story about their record year:

https://www.trains.com/trn/news-reviews/news-wire/bnsf-railway-reports-record-financial-results-for-2021/

And the workers weren't even asking for any sort of increase of this scale.  They were simply wanting to reap a reasonable amount of the reward for the success they helped create.  That's not too much to ask and frankly, I think what they had to settle for was paltry.  

[TexasTiger 12,947]

4 minutes ago, TitanTiger said:

 

Just to give you an idea of what was happening, see below.  This wasn't greedy workers trying to inflate their value to a company and costing all of us.  This is a company that's insanely profitable by any measure that simply didn't want to share much of the spoils of success with the average worker on the ground making it happen.  Here's a story about their record year:

https://www.trains.com/trn/news-reviews/news-wire/bnsf-railway-reports-record-financial-results-for-2021/

And the workers weren't even asking for any sort of increase of this scale.  They were simply wanting to reap a reasonable amount of the reward for the success they helped create.  That's not too much to ask and frankly, I think what they had to settle for was paltry.  

They basically probably won’t break even with just a 10% raise over the next two years of inflation.

[I_M4_AU 7,853]

18 minutes ago, TexasTiger said:

They basically probably won’t break even with just a 10% raise over the next two years of inflation.

Thanks, Brandon.

[TexasTiger 12,947]

1 minute ago, I_M4_AU said:

Thanks, Brandon.

One man, global inflation. Horrific. 🤦‍♂️
 

Thanks, though. This one issue highlights how pathologically delusional you guys are.

[I_M4_AU 7,853]

Just now, TexasTiger said:

One man, global inflation. Horrific. 🤦‍♂️
 

Thanks, though. This one issue highlights how pathologically delusional you guys are.

Its the one issue that will (hopefully) turn Congress to red this November.  It sure beats the *Orange man bad* campaign Dems are pushing which truly is one man is horrific.

[TitanTiger 20,499]

11 minutes ago, I_M4_AU said:

Thanks, Brandon.

This is such oversimplistic thinking.

[I_M4_AU 7,853]

10 minutes ago, TitanTiger said:

This is such oversimplistic thinking.

Heaven forbid Brandon gets blamed for anything he and his policies have created.  That would be simplistic thinking.

[autigeremt 6,643]

One thing Teddy Roosevelt taught me......companies need to treat employees as "partners". Neither can succeed without the other. 

[TexasTiger 12,947]

1 hour ago, I_M4_AU said:

Its the one issue that will (hopefully) turn Congress to red this November.  It sure beats the *Orange man bad* campaign Dems are pushing which truly is one man is horrific.

It’s delusional & moronic. You clearly understand nothing about global economics. You just want to blame a Democrat for everything. Joe just happens to be holding the seat. 

[Leftfield 2,608]

1 hour ago, I_M4_AU said:

Its the one issue that will (hopefully) turn Congress to red this November.  It sure beats the *Orange man bad* campaign Dems are pushing which truly is one man is horrific.

It's funny...you repeatedly accuse most of the anti-Trump people on this board of Trump Derangement Syndrome, even those who have traditionally voted Republican, yet your hatred for Biden shows with almost every post. I can't remember you pointing out a single positive thing about him or anything he's done.

Irritable Biden Syndrome?

[I_M4_AU 7,853]

13 minutes ago, Leftfield said:

It's funny...you repeatedly accuse most of the anti-Trump people on this board of Trump Derangement Syndrome, even those who have traditionally voted Republican, yet your hatred for Biden shows with almost every post. I can't remember you pointing out a single positive thing about him or anything he's done.

Irritable Biden Syndrome?

You’re wrong, I said killing the terrorists in Kabul was a good thing.

What is ironic is according to most on this board, Trump did nothing of any good for the US Citizens and Biden is untouchable.

You’re conflating Biden’s Irritable Bowl Syndrome with your made up acronym.

[Leftfield 2,608]

14 minutes ago, I_M4_AU said:

You’re wrong, I said killing the terrorists in Kabul was a good thing.

Wow. I stand corrected.

14 minutes ago, I_M4_AU said:

What is ironic is according to most on this board, Trump did nothing of any good for the US Citizens and Biden is untouchable.

I think that's a major exaggeration. Most here have admitted that there were some policy decisions by Trump that they agreed with, even if they disagreed with him on most. Also, disagree that everyone finds Biden untouchable - I haven't seen a person here yet say that he shouldn't be charged is something is found in the Hunter investigation. 

18 minutes ago, I_M4_AU said:

You’re conflating Biden’s Irritable Bowl Syndrome with your made up acronym.

Uh, yeah, that's what you call, you know, a joke.