Members of the Agricultural Transportation Working Group are warning Congress and the country to prepare for the potential threat of a rail strike or lockout, stating that it could “lead to shutdowns of rail-dependent facilities resulting in devastating consequences to our national and global food security.”
An analysis from the Association of American Railroads (AAR) reports the losses from a rail strike could total $2 billion per day of the strike.
The oncoming holiday season brings the highest volume of consumer demand across all industries, including the agriculture industry. Demand for staple items used in holiday meals increases the need for consistent shipments and deliveries to grocery stores and other suppliers.
Ag coalition encourages action
On Sept. 15, the Biden administration coordinated with the National Railway Labor Conference (NRLC) and 12 unions in an attempt to postpone a potential strike to allow for negotiations. In a Nov. 3 letter from the Agricultural Transportation Working Group—made up of 193 industry groups—to congressional leaders, it was noted that “two unions have voted to not ratify while members of four others continue to review the agreement,” and the letter encouraged “swift action to avert a rail strike or lockout.”
At the time of the letter’s writing, the next potential rail shutdown was scheduled for Nov. 19, which created a very short window of time that Congress could act when they returned to session on Nov. 14.
A potential strike was postponed until early December, according to a statement by the Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters.
The National Carriers’ Conference Committee (NCCC, a group within NRLC that represents the railroad companies) said the four unions that have not fully resolved the bargaining round initially endorsed the agreements, but now at least three of those unions are threatening to strike if additional demands are not met.
All 12 railway unions must agree to their proposed contracts in order to prevent a rail strike, and the contracts are voted upon by the roughly 115,000 workers the unions represent. If one union decides to strike, all of the unions will honor the picket lines.
“Should the unions without ratified agreements remain unwilling to do so, they are expected to strike and Congress may need to intervene—just as it has in the past—to prevent disruption of the national rail system,” NCCC said.
National Grain and Feed Association (NGFA) President and CEO Mike Seyfert cautioned in a statement, “A rail strike or lockout combined with existing challenges in the rail system and other modes of transportation, including trucking shortages and low water levels on the Mississippi River hindering barge shipments, would be catastrophic for the U.S. economy.”
Background
The potential for a rail strike began in the summer of 2022 after three years of failed contract negotiations. Unions have generally asked for pay increases, better working conditions, less strict attendance rules and additional paid time off.
Railroads have been preparing for the potential threat by minimizing shipments in case the strike does come to fruition.
Max Fisher, NGFA chief economist, told Farm Journal in September, “The railroads don’t want to have the cars and equipment out in areas of the country where they can’t protect them very well. So, they’re taking steps to mitigate damages. For our members, they’re looking at essentially not receiving their grain on time and not being able to then ship out the finished products such as ethanol, flour, things of that nature.”
Within the livestock sector of the agricultural industry, a major issue is the inconsistent delivery and shipment of corn to feedyards across the country. These shipment inconsistencies can also cause issues for processing facilities by either increasing backlogs or spoiling products.
In a statement earlier this summer, Seyfert said, “It seems to be most severe right now in the West, or for those who are trying to ship west on those lines that are going into the western part of the country. Either for feed purposes, processing purposes, or export purposes to the western side.”
In June, Foster Farms requested the Surface Transportation Board execute an emergency service order, stating, “The Union Pacific Railroad Company (‘UP’) over the past five months have clearly established that UP, utilizing its current operating practices, cannot transport the rail traffic offered to it (by Foster Farms) in a manner that properly serves the public, meaning (1) Foster Farms, (2) the growers of the millions of animals to whom Foster Farms supplies feed made from corn delivered by UP in unit trains, and (3) the public at large that depends on the affected livestock for food.”
The unions have opposed previous deals that offered five-year contracts that included a 24% increase in wages and $5,000 bonuses to employees. Track maintenance workers previously requested seven days of paid sick time to be added to the deal in order for them to agree to the contract.
The involved parties in this rail strike reach beyond the agricultural industry and involve every commodity and consumer. As of Nov. 21, the labor deal was rejected by one of the largest rail unions, the Sheet Metal, Air, Rail and Transportation Workers Transportation Division. It is unclear what will happen leading up to the next proposed rail strike in early December. — Chloй Fowler, WLJ correspondent
