The Rail Strike Isn’t Over ‘Till It’s Over

On September 15th, one day before unionized railway workers were set to strike, Labor Secretary Marty Walsh announced that a tentative agreement had been reached. Everyone gave a sigh of relief; a strike is the last thing the country needs right now. 

Looking at a potential strike by the numbers:

• According to the Wall Street Journal, 28 percent of U.S. freight moves via the rail network, second only to trucking at 40 percent.
• Approximately 467,000 long-haul trucks would be needed per day to handle the freight currently moved by rail, according to the Association of American Railroads
• The U.S. Chamber of Commerce estimated that a shutdown of the nation’s rail service would cost more than $2 billion per day.

Listen to this week’s episode of Dial P for Procurement: Tentatively Making the Trains Run on Time

Although the Biden administration celebrated with a ceremony in the White House Rose Garden, this matter is far from over. 115,000 members of the 12 major unions must vote to ratify or reject the offer on the table. Votes are currently scheduled well into November – and that doesn’t even allow for the time required to count and tally.

What are the unions looking for?

The key issues for union members are wages, attendance policies, sick time, and scheduling concerns. Although it is usually a safe bet to assume money is the most important issue, that doesn’t seem to be the case here.

From what I read in multiple sources, members seem more concerned about their benefits. Apparently, they believe that money can be worked out, but benefit terms and attendance policies are enforced more rigidly, due in part to labor shortages.

Labor has been steadily declining in rail, as technology and cost cutting measures have been implemented.

• According to Reuters, the railroad industry has lost nearly 30 percent of its workforce over the past six years
• In 1970, there were 600,000 rail workers, and today there are around 150,000
• Workers are on call, and often receive short notice that they are needed to report for duty. This places a strain on workers and their families, especially given the challenge of securing a day off.

What terms and conditions are on the table?

With guidance from the Presidential Emergency Board (PEB), the union-negotiated terms and conditions include:

• An immediate 14 percent pay raise
• The biggest wage increases in more than four decades: 24 percent by 2024, bringing the average railroad worker’s annual pay to $110,000 a year
• $1,000 in annual bonuses over five years
• No increases in health care co-pays and deductibles
• Voluntary assigned days off
• One additional paid day off
• No loss of attendance points for routine doctor’s appointments, hospitalizations, and surgical procedures

In the union members’ own words…

The ink on the agreement wasn’t dry before voices of discontent started to emerge.

As reported in The Hill, “Ron Kaminkow, an organizer at Railroad Workers United, which represents rank-and-file railroaders, said that there’s “a lot of anger, confusion and hostility” toward the new agreement, which many workers feel is intentionally vague.”

The same article quotes an engineer from Norfolk Southern who asked to remain anonymous for fear of retaliation. “Workers are pissed off and this time we actually have a lot of leverage. I know I’m not going to accept anything less than what we deserve.” 

Increasing the pressure on everyone is the fact that Congress has all kinds of ideas about how to head off a strike. I think everyone – including Congress – is hoping that doesn’t become necessary.

What now?

While we wait for the votes to be cast and counted, there is a lot we can learn from news coverage of this strike. For instance, how did carriers position themselves to mitigate the impact? 

Amtrak cancelled long run trips, and rail carriers stopped moving hazardous shipments to prevent them from becoming stranded mid-trip. In these cases, the cost of mitigation can be as costly as disruption, and since the outcome will be uncertain for the next month or so, this is a lesson we can all learn now.

Most importantly, however, we see – yet again – that news headlines often gloss over important details. Nothing is over 'till it’s over and the more the voices declaring success have to gain, the more skeptical we should be of their message. Once again, the responsibility for sorting hype from facts falls to supply chain professionals.

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