Carriers won’t lock out workers, negotiators meet with Labor Secretary

Rail carrier and union negotiators met in the office of Labor Secretary Marty Walsh on Wednesday as the parties tried to broker a deal before Friday’s strike deadline.

The meeting started just after 9 a.m. ET.

The railroads, for their part, “have no intention of locking out workers on Friday if negotiations are unsuccessful,” the Association of American Railroads told CNBC.

Dennis Pierce, the unions’ chief negotiator, said members had warned that 10% of the workforce could leave if issues were not resolved by the deadline. Sick leave policies and quality of life concerns were the main sticking points that remained.

“Our proposal to not pay sick leave doesn’t cost them money. It’s something they can manage. It doesn’t hurt their business model,” said Pierce, president of the Brotherhood of Locomotive. Engineers and Trainmen, or BLET. “The railroads need to start treating employees like humans, instead of imposing these policies that just drive people out of the industry.”

Eight of the 12 railway unions reached tentative agreements with companies earlier this week, but two of the biggest unions, BLET and transport division SMART are still in talks with carriers. The two groups represent about half of unionized railway workers.

The so-called cooling-off period, which allowed the two sides to continue negotiations, ends at midnight on Friday, which means a strike could take place early in the morning. In anticipation of a strike, the railways have already begun diverting freight.

Walsh’s involvement comes as the Biden administration braces for a work stoppage. A strike, which could affect around 60,000 workers and idle more than 7,000 trains, could cost the US economy more than $2 billion a day.

In an email to members, the National Customs Brokers & Forwarders Association of America listed the timing of the closures. CNBC has compiled a list of some of the rail changes ahead of the deadline:

  • Wednesday: BNSF, which is owned by Berkshire Hathaway, stops moving refrigerated units in indoor facilities
  • Wednesday: Norfolk Southern stops receiving exports
  • Thursday: CN stops receiving exports

Norfolk Southern and the other railroads cut freight in anticipation of a strike to move essential hazardous materials, such as chlorine and ethanol. This freight has priority over common freight.

But NS told CNBC it has changed some plans to accommodate more regular shipments.

“We continue to provide as much flexibility as possible to customers for as long as they can,” a spokesperson for the railroad told CNBC on Wednesday. “We have extended the deadline for accepting trucks bringing containers into our land terminals until 5 p.m. tonight.”

Originally, NS intended to stop accepting containers on Tuesday.

Recovering from the disruption created by a strike could take weeks or even months, according to CNBC.

“The delivery of oversized transformers for transmission and distribution, natural gas turbines and power generators, as well as renewable technologies such as wind turbine sections and blades, depend on America’s rail systems,” Marco said. Poisler, COO of UTC Overseas, warning of “devastating delays” for deliveries.

“Moving such goods requires months of rail planning and engineering resources to identify the specialized rail assets available with the correct axle gauge and deck height to achieve rail clearance,” Poisler said.

Biggest sticking points remaining in critical contract talks between U.S. railroads and unions

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