All parties in the supply chain, including shippers, importers, suppliers and carriers can rest easy knowing that the rail strike has been averted. Last Friday, December 2, 2022, President Biden prioritized the stability of the broader economy over the fine details of the union demands.
On November 30, 2022, the House of Representatives passed a bill that would force management and labor to accept a White House-negotiated deal. This deal had been ratified by eight of the 12 unions at the table. The remaining four unions, which represent more than half of the nation’s unionized freight rail workers, voted to reject the negotiation. The following day, the U.S. Senate passed the bill and by Friday, December 2, 2022, President Biden signed a deal that leveraged the government’s power to keep railroad workers on the job.
The White House-brokered deal will provide plenty of benefits for rail workers, including a 24% pay increase by 2024 and a ratification bonus of $11,000. The contract guarantees one paid personal day off and no dedicated sick days, although the carriers are to provide some flexibility for doctor’s appointments.
The December 9, 2022 strike has been avoided. This strike could have had serious and negative economic repercussions with one study estimating as many as 750,000 job losses and up to $2 billion per day in lost revenues.
Cargo rail service users can anticipate increased costs as a result of the increased labor costs in the new contract.
For any questions regarding this update, please contact your Western Overseas representative.