Businesses Urge President Biden to Resolve Rail Strike
As the deadline for the freight rail strikes approaches, President Joe Biden is weighing his options. The outcome of this situation, good or bad, is going to have massive implications for the shipping industry. As the deadline gets closer and closer, it’s important to understand how this situation could impact your business.
What is the Rail Strike?
When President Biden was campaigning, he pledged to be the most “pro-union” president the country had ever seen. Well, that pledge is currently being put to the test as some 112,000 employees of the largest US freight rail carriers threaten to go on strike. This move could severely strain an already strained supply chain. But why are union representatives threatening a strike?
The US’s largest railroads and the unions have been negotiating their expired labor contract for more than two years. Unfortunately, the railroads have yet to meet the demands for higher pay (to account for inflation and higher cost of living) and benefits. Even the federal board that oversees the mediation process abruptly ended talks earlier in the month. In order to avoid a strike, business owners around the country are urging Biden to intervene in hopes of avoiding the industry’s first work stoppage in nearly 30 years.
Just How Important is This?
The potential strike could have devastating consequences for time-critical shipping and domestic freight shipping services. Freight rail accounted for 28% of US freight movements in 2020, according to an analysis of transportation department data by Union Pacific. Over the past few years, businesses have become increasingly more dependent on rail carriers to transport freight due to cargo ship backlogs and a shortage of truck drivers.
There are pathways for President Biden to delay the strike or avoid it altogether. The Railway Labor Act, passed in 1926, mandates that both sides enter a 30-day “cooling off” period after the end of mediation before any labor activity can begin. This law allows the US president to delay any work stoppage for 60 days by appointing an emergency board to investigate the stalemate.
How Can President Biden Help?
If President Biden does appoint an emergency board before the cooling-off period ends, the unions would be forbidden to strike until after the board adjourns and the parties wait out a second cooling-off period. This would put off any potential strike until September, giving both sides more time to negotiate. Remember, Biden pledges to be the most pro-union president in American history. This situation is putting this pledge to the ultimate test.
With midterm elections fast approaching, experts believe Biden will need to stand by his pledge or risk upsetting voters. At the same time, President Biden also pledges to lower inflation and solve the supply chain woes. Both inflation and supply chain issues would be exacerbated by a large-scale strike.
What is at Stake
Thousands of rail workers have voted to strike in internal union elections if Biden does not act by the Monday deadline. Rail workers believe that chronic understaffing and unpredictable shift scheduling have made their jobs miserable even though rail carriers made huge profits over the past few years. Workers are trying to resolve problems that have occurred over the past couple of decades, which makes the stakes much higher.
A tight labor market has empowered workers across the country who are now pushing their employers for higher pay and better benefits. This has led to unprecedented union victories at huge companies like Starbucks and Amazon. Strikes are also impacting other sectors of the shipping industry. Nearly 22,000 dockworkers and port workers are embroiled in their own labor dispute after their contract expired earlier in the month.
Do You Need Help With Your Logistics?
The potential rail strike will impact businesses around the country. This is yet another example of how unpredictable and unstable the shipping industry can be. If you need help with your logistics, our team here at Trifecta Transport is here to help. We can take care of your logistics, ensuring you get the products you need regardless of what’s happening in the shipping industry. Reach out today to find out what it is we can do for your specific shipping needs.