Imminent rail strike could be blocked by US federal law

Update 18th July, 2022

Rail strikes, planned for today, have been averted due to last minute action taken by President Biden on Friday, 15th July.

Biden's intervention means that it is now forbidden for rail workers to strike for a 60-day period. The news is seen by some only as a short-term solution, however, concerns remain that if a solution is not sought between unions and management by that time it is likely that strikes will still occur.

During the 60-day period, a board named by Biden will be working alongside both parties with the aim to reach a compromise in order to avoid any further industrial action, which if unsuccessful could cause major disruption to US supply chains.

We will continue to keep a close eye on possible supply chain interruption and update this page with the latest information. 

For more details on US supply chain services, please contact us here.

15th July, 2022

Negotiations to discuss pay and benefits have broken down once more, with the current labour contract talks remaining at an impasse since its expiration in 2020.

The Railway Labor Act’s cooling off period comes to a close on Monday, giving President Biden the opportunity to appoint an emergency board ahead of that date in order to incur an additional investigation period in which workers would be forbidden to take industrial action, a move that would avoid any damaging work stoppages that could unsettle North America’s already fragile supply chain. If President Biden were to step in ahead of the end of the Monday deadline, workers would not be able to take action again until September when the new period would end.

Many US businesses have become increasingly dependent on using rail as a means of transportation as the country has seen port congestion and driver shortages, so if no formal action is taken by the president then unions will have the ability to strike as of Monday, a move which would be costly for both rail carriers and customers.

The current stalemate continues as the federal regulatory body for the rail industry published a 29% decrease in the railroad workforce since 2016, a situation that unions say has left trains dangerously understaffed and employees overworked, whilst the National Railway Labor Conference has offered a counter including retroactive reparations and “significant pay increases”.

The most recent US rail strike in 1992 reportedly cost the US economy $50m per day, a number which is likely to be much higher in 2022 due to various economical factors. American manufacturers would also be hit hard, with one trade group stating that a rail strike would threaten to “undermine the industry’s competitiveness” as the US looks towards its busiest trading period in the run up to holiday season.

It is likely that the board appointed by Biden in the coming days will come under heavy scrutiny, with both sides citing board members for the breakdown in previous negotiations.