OMAHA, Neb. — The special board appointed by President Joe Biden to intervene in stalled railroad contract talks suggested Tuesday that 115,000 rail workers should get 24% raises and thousands of dollars in bonuses as part of a new agreement to avert a strike.
Railroads and unions will use those recommendations as the basis for a new round of negotiations over the next month. It remains to be seen, however, whether railroads will agree to the higher wages or find ways to address union concerns about working conditions.
If the two sides can’t agree on a new deal by mid September, federal law would allow a strike or lockout. But Congress is likely to intervene before then to keep the supply chain moving.
A railroad strike could devastate businesses that rely on Union Pacific, BNSF, Norfolk Southern, CSX and other major freight railroads to deliver raw materials and ship their products. In past national rail labor disputes, lawmakers have voted to impose terms on the railroads before workers could strike.
Although unlikely, a full strike would leave the trucking industry theoretically seeing “enormous demand due to container and boxcar freight,” Avery Vise, vice president of trucking and research at FTR Transportation Intelligence, has said.
Dean Croke, principal industry analyst at Columbus, Ohio-based DAT Systems, went further, saying that a railroad strike “would make the last two years during the pandemic pale into insignificance. … The volume of freight shippers would try to move would overwhelm all sectors of trucking.”
A White House official said Biden is optimistic the report will provide a good framework for successful negotiations because avoiding a rail shutdown is in the nation’s interests.
The report was distributed to the parties Tuesday, and The Associated Press obtained a copy of it, but the railroads and the unions didn’t immediately comment on any details.