- Rail workers might go on strike in December, potentially rattling the supply chain and the whole economy.
- The president of the Brotherhood of Locomotive Engineers and Trainmen (BLET) said workers are enraged.
Rail workers are once again gearing up for a strike that could send shockwaves through the US economy.
Railroad unions are split on whether or not to move forward with a deal brokered with management in September. The tentative agreement, which offered workers a 24% pay increase but just one extra paid day off, came after nearly a full day of negotiations at the Department of Labor brokered by the Biden administration.
But for some workers, that agreement was not enough. The country's two biggest rail unions' votes yielded one slim acceptance and one slim rejection, indicating that some workers still want more from a deal. Ultimately, if any union goes on strike, other rail unions likely will not cross the picket line.
A strike by rail workers would send ripple effects throughout the supply chain, and could even plunge the already teetering US economy into a recession, Ted Stank, faculty director of the Global Supply Chain Institute at the University of Tennessee at Knoxville, told Insider.
Major products shipped by train include industrial materials like petroleum, coal, and lumber, whereas most consumer products you'd buy in a store are transported by truck.
That means if a strike does take place, the average shopper wouldn't feel the effects right away. But, Stank said, if materials typically shipped by rail have to be temporarily transported by truck as a result of the strike, it would raise the cost of shipping, which would in turn raise retail prices.
"We wouldn't see it at the retail shelves initially," Stank said. "But what we would see is impact at the gas pumps and impact on transportation prices overall."
"Railroads stand ready to reach new deals based upon the PEB framework with our remaining unions, but the window continues to narrow as deadlines rapidly approach. Let's be clear, if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy," Association of American Railroads president and CEO Ian Jefferies said in a statement.
Rail workers voted in record numbers after feeling "alienated," "enraged," and "mistreated, all for the sake of profit"
The Transportation Division of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD), which has over 28,000 eligible voting members, narrowly voted down the proposal. At the same time, the Brotherhood of Locomotive Engineers and Trainmen (BLET), narrowly voted to ratify the agreement. Both saw record turnout for the votes.
For Dennis Pierce, the president of BLET, the results aren't surprising.
"Both votes were close. They barely failed, we barely ratified is one way to look at it," Pierce told Insider. "That's because we're in the cab of the locomotives together every day."
Pierce said it means a lot that over two-thirds of BLET showed up in record numbers to vote and have a say in their future. Of those who showed out, 46.5% voted against ratifying the contract — pointing to an engaged membership that's still torn. Members are especially fired up about a lack of paid time off.
"The things the railroads have done operationally with their business practices have really alienated their workforce. And I've told a lot of people, they're not only engaged, they're enraged," Pierce said. "The way they've been treated over the last three to five years on a lot of these class one railroads is why they're so involved, because they've been, I think, so mistreated all for the sake of profit when it comes to how these railroads run their operations right now."
While BLET is moving forward on ratifying the contract, the other unions — like SMART-TD — could still end up out on the picket line in early December. If any union does strike, Pierce said, "no other union is going to cross that picket line in the railroad biz."
"It pretty much takes everybody out," he said.
In the meantime, Pierce said the union's goal right now is to make sure "the American people understand that this is not just some greedy bunch of employees who can't be satisfied."
He continued: "We have real needs to try to improve this workplace and get these folks access to time away from work."
Are you a freight rail worker? Have a tip or story to share? Email these reporters from a non-work address at htowey@insider.com and jkaplan@insider.com.