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Rail Unions Move Closer to National Strike

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Another large labor union has voted to reject the rail deal brokered in part by the Biden administration, moving the industry closer to a strike, according to CNBC.

Split decision: Two of the largest railroad labor unions in the United States went separate ways during their contract ratification votes, which were announced on Monday. The Sheet Metal, Air, Rail and Transportation Workers – Transportation Division voted against the proposed agreement by a slim margin, while the Brotherhood of Locomotive Engineers and Trainmen voted to ratify it.

What it means: This latest action raises the likelihood of a rail work stoppage in early December. In total, 8 of 12 unions have now ratified the tentative agreement concluded in September while the rank-and-file membership of 4 unions have rejected it.

  • Should one union choose to go on strike, the broad impact would cripple the national freight rail network.

The impact: The railroad industry and major shipping groups have found that a strike would likely cost around $2 billion per day, also according to CNBC. It would affect every major rail operator.

  • “The American Chemistry Council, which represents companies including 3M, Dow, Dupont, BP, Exxon Mobil and Eli Lilly, said a rail strike would impact approximately $2.8 billion in chemicals cargo a week, and lead to a GDP decline and renewed inflation.”
  • “Other industries, from agriculture to retail, have warned of the economic risks of a strike.”

Next steps: Negotiations will continue through a cooling-off period that runs until early December. If a deal is not reached by 12:01 a.m. EST on Dec. 5, a strike could occur. The NAM and others have urged Congress to take action under the Railway Labor Act and pass legislation that would avert a strike if railroads and rail unions cannot reach such a deal.

What we’re saying: “Manufacturers are disheartened by today’s news on the further unraveling of rail negotiations,” said NAM President and CEO Jay Timmons. “It’s clear that Congress, both Democrats and Republicans, must be prepared to work together immediately to avert a rail strike and prevent further damage to our supply chain.”

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