U.S. Chamber of Commerce makes its case to Congress on impact of potential rail strike

As the clock continues to tick down towards the 12:01 A.M. September 16 deadline, which will officially mark the end of a 30-day cooling off period between the 12 United States-based railroad labor unions and six largest freight railroad carriers, tensions continue to run high, given the ongoing uncertainty afloat, even though 10 of the 12 unions have reached tentative labor agreements.

Those tensions were evident in a letter penned by Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, for the U.S. Chamber of Commerce, to Speaker of the House Nancy Pelosi, Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, and House Minority Leader Kevin McCarthy.

Bradley made it clear to the political leadership group that absent voluntary agreements with each union or an intervention by Congress, the U.S. Chamber is concerned that a national railroad strike is “highly likely at the conclusion of the current ‘cooling off period,’ adding that if voluntary agreements are not reached that Congress needs to move forward and implement the recommendations of the White House’s Presidential Emergency Board (PEB).  

“A shutdown of the nation’s rail service would have enormous national consequences,” wrote Bradley. “It would lead to perishable foods such dairy, fruits, and vegetables spoiling at their points of origin, would halt Amtrak service for approximately 12.2 million daily riders in 46 states, would disrupt materials and goods being delivered to factories and ports, and would inhibit the transport of heating fuel and other important fuels and chemicals. These are only a few examples of the damage of a rail shutdown. Even the contingency planning for a service shutdown that is already underway presents its own concerns as it requires days of winding down service to clear rail networks and threatens to send equity and commodity markets spiraling due to uncertainty. Altogether, the costs of such a shutdown to the U.S. economy could come out to $2 billion per day—and U.S. consumers would see this impact through shortages of many key goods and higher prices.”

Bradley gave the PEB’s recommendations tempered support, explaining that while not satisfactorily addressing the issues raised by the unions and carriers, it still represents what he called a viable compromise, including: a 24% wage increase (with an immediate 14.1% increase), as well as an immediate lump sum payment averaging $11,000.

What’s more, Bradley observed that the U.S. Chamber believes a voluntary agreement by all parties is the best outcome, but Congress may need to intervene, in order for the parties to come to terms, with the best outcome being for Congress to impose the PEB’s recommendations.

“While not perfect, these recommendations represent the best framework for an agreement that address the most significant concerns for all sides,” he wrote. “Otherwise, allowing the negotiations to continue will bring further economic uncertainty to the American business community and consumers.”

While progress has been made, with 10 of the 12 unions reaching tentative agreements, more work needs to be done for the parties to cross the finish line soon after the midnight hour on September 16. What happens at this point remains to be seen as the deadline gets closer by the hour.