Railroad Strike Averted Thursday Evening


by Katie Micik, DTN Staff Reporter

OMAHA (DTN) — Railroads reached voluntary agreements with two unions Thursday evening and a third union agreed to extend talks, moves that avert a strike and render Congressional intervention unnecessary. A strike would have crippled grain movement during one of the busiest shipping seasons.

Retailers say rail is responsible for $2 billion in economic activity daily. About 66 million bushels of soybeans are shipped via rail each week at this time of year and a stoppage could have shortened the crops’ already narrow six-month export window.

The possibility of disruption prompted President Barack Obama to intervene in the dispute in October, and Congress was prepared to vote on resolutions Friday that would have prevented the unions from striking. The National Grain and Feed Association along with countless other organizations reliant on rail urged Congress to ensure uninterrupted operation of essential freight rail services, a power granted under the Constitution’s commerce clause.

“The NGFA is pleased that tentative agreements have been reached with two of the three rail labor unions, and that the third has agreed to extend the cooling-off period until Feb. 8,” said Randy Gordon, NGFA vice president for communications and government relations.

The two labor unions that reached agreement are the Brotherhood of Locomotive Engineers and Trainmen and the American Train Dispatchers Association. One other union, the Brotherhood of Maintenance of Way Employees, has agreed to a longer cooling-off period. The unions came close to a strike in October before an emergency mediation board forced a cooling-off period with 10 of 13 unions reaching agreements with the railroads.

“We’ll be closely monitoring whether the agreements are ratified by the memberships of the two unions, as well as developments in the ongoing negotiations between the carriers and the Brotherhood of Maintenance of Way Employees,” Gordon said. “And we won’t hesitate to renew our call on Congress to enact emergency legislation to preclude a strike if that becomes necessary at some point in the future, given the importance of freight rail service for shipments of grains, oilseeds, feed ingredients, processed commodities and a host of other vital agricultural products.”

Freight railroads account for approximately 35{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e} of the transport of agricultural products, according to NGFA’s letter to Congress. Railcar loads spike during the harvest season, averaging above 20,000 cars of soybeans each week. During the week ending Nov. 19, 22,750 railcars were loaded with beans. That means about 66 million bushels of soybeans worth $744.4 million (based on Thursday’s closing price) are shipped via rail each week.

A strike could have forced merchandisers to rely more heavily on the truck market in an effort to make deliveries on time and avoid letting freight sit on rails during a strike.

The last railroad strike occurred 20 years ago and lasted only one day before Congress passed legislation to end it. A 1982 strike lasted four days, the Associated Press reported.

“Everyone wins when we reach voluntary agreements,” said Kenneth Gradia, chairman of the National Carriers’ Conference Committee, which bargains on behalf of the railroads to the AP. “In a tough economy, these agreements offer a terrific deal for rail employees. They lock in well-above market wage increases of more than 20{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e} over six years, far exceeding recent union settlements in other industries.”


© Copyright 2011 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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