A newly released report from the Association of American Railroads (AAR) has found that interruption to the country’s rail service could impact economic output and cost more than $2 billion per day.
A shutdown looms as unions continue to negotiate with major railroads over the terms of their contracts. If contract negotiations cannot be settled by Sept. 16, a service interruption could idle more than 7,000 trains daily, and trigger retail product shortages, widespread manufacturing shutdowns, job losses and disruptions to hundreds of thousands of passenger rail customers, AAR said.
“As the freight sector heads into peak shipping season, a nationwide rail work stoppage would result in an unnecessary $2 billion daily economic hit,” said AAR President and CEO Ian Jefferies. “President Biden’s PEB [Presidential Emergency Board] recommended terms that would maintain the highest quality health care coverage and result in compounded wage increases of 24%, bonuses totaling $5,000 — the highest pay increases in nearly 50 years.
The National Carriers Conference Committee (NCCC), which represents the nation’s freight railroads, announced on Sept. 2, it had reached tentative agreements with the International Brotherhood of Electrical Workers and the American Train Dispatchers Association. Combined with those other tentative agreements announced earlier this week, that brings to five out of 12 unions representing more than 21,000 workers who have reached agreements.
The agreement includes a 24 percent wage increase during the five-year period from 2020 through 2024 with a 14.1 percent increase effective immediately, and five annual lump-sum payments of $1,000, NCCC said in its statement. The organization urged other unions to come to agreements as well.
It is critical for all stakeholders – including customers, employees, and the public – that all parties promptly resolve the negotiations and prevent service disruptions,” the organization said. “Accordingly, we look forward to additional discussions with the unions that have not yet reached tentative agreements and will continue seeking voluntary agreements based on the PEB’s recommendations.”
AAR urged the unions to come to an agreement as well to prevent Congress from stepping in.
“Like those unions that have already tentatively agreed to the PEB deal, each of the remaining unions can still enter into agreements based on these recommendations, AAR said in a statement. “However, should negotiations fail and result in a work stoppage, Congress must act to implement the PEB recommendations — rewarding employees and stopping unnecessary economic harm and uncertainty for rail customers.”
Unions say they want their concerns over attendance policies, paid leave and expenses taken to arbitration, or negotiated separately from wages. Workloads have become unbearable, the unions said, since railroads have eliminated nearly one-third of their workforces over the past six years.