In the early Major U.S. rail freight companies reached a tentative agreement with unions Thursday morning, narrowly averting a nationwide rail shutdown less than 24 hours before the strike ends. A work stoppage would have devastating consequences for the national economy and supply chain, almost 30 percent of which depends on the railways. Even a near miss had some impact. Amtrak’s long-haul passenger and hazardous materials services are now back after the railroad suspended them to prevent people or cargo from being stranded by the strike.
The preliminary agreement, which must be voted on by union members, was negotiated by the Biden administration. It began working this week to avoid a shutdown that would have caused major disruptions and worsened inflation by limiting supplies of essential goods and increasing shipping costs. Rail unions and the Rail Industry Association issued statements Thursday welcoming the deal. But freight rail service was unreliable long before this week’s standoff, and trade groups representing rail customers say there is still a lot of work to do to restore it to acceptable levels.
Only two-thirds of trains arrived within 24 hours of their scheduled times this spring, down from 85 percent before the pandemic, forcing rail customers to suspend operations or — grimly — consider euthanizing their hungry chickens. Scott Jensen, a spokesman for the American Chemical Council, whose members depend on rail transport of chemicals, called the latest shutdown threat “another ugly chapter in this long saga of rail freight problems.”
While Thursday’s agreement was praised by rail-dependent companies, the ACC, the National Grain and Feed Association and other trade groups also say the rail industry needs further reforms. Competition has lessened as services are concentrated among a handful of major railroads, which have cut their total workforce by 29 percent over the past six years. Rail customers have asked lawmakers and rail regulators to intervene. The proposals include federal minimum service standards, including penalties for leaving loaded cars at rail yards for long periods of time, and a rule that would allow customers to move freight to another service provider at certain interchanges to circumvent the fact that many customers are captive to a single carrier.
In recent years, major U.S. freight railroads have made major layoffs as part of an effort to implement a leaner, more profitable operating model called Precision Scheduled Railroading. Profits have indeed soared, with the two largest freight carriers, Warren Buffett-owned Union Pacific and BNSF, breaking records last year. But after many workers decided not to return to the rail industry after vacations due to the pandemic, staff shortages have plunged the network into crisis. At federal hearings this spring, rail customers complained that the network, which had been stripped of its resilience, suffered from the worst-ever service levels.
Many rail freight jobs have always involved erratic schedules and long stretches away from home, but workers have complained that job cuts mean even longer hours, higher injury rates and less predictable schedules. Many workers were denied sick leave and were penalized for taking time outside of their vacation time, which averaged three weeks a year, or vacation and personal time, which reached 14 days a year for the most senior employees.