A US Rail Strike Was Averted—but the Crisis Is Far From Over

Less than a day before a strike deadline, major US freight railroad companies reached a tentative agreement with unions. A work strike would have wreaked havoc on the nation's economy and supply chain, which rely on rail. A close miss had an impact. Long-distance passenger services, which use freight tracks, and hazardous materials shipments are being restored after railroads suspended them to prevent people from being stranded by a strike.

The tentative agreement was brokered by the Biden administration. It had to scramble this week to avoid a shutdown that would have caused major disruption and worsened inflation by driving up shipping costs. The railroad industry association and rail unions said they were happy with the deal. The trade groups representing rail customers say much work still needs to be done to restore freight rail service to acceptable levels.

Only two-thirds of trains arrived within 24 hours of their scheduled time this spring, down from 85% in the pre-pandemic season. Scott Jensen is a spokesman for the American Chemistry Council, which depends on rail to ship chemicals.

The National Grain and Feed Association, as well as other trade groups, argue that more reforms are needed in the rail industry. The combined workforce of the big railroads has been slashed over the past six years. Rail customers have asked for help. Federal minimum service standards, including penalties for leaving loaded cars sitting in rail yards for long periods, and a rule that would allow customers to move cargo to another service provider at certain interchanges, are among the suggestions.

Major US freight railroads have made deep staff cuts in recent years in order to implement a leaner, more profitable operating model. The two largest freight carriers, owned by Warren Buffet, broke records last year. The rail network was in crisis after many workers decided not to come back to work. At federal hearings this spring, rail customers complained that their service levels were the worst they had ever experienced.

Many freight rail jobs have always involved erratic schedules and long stretches away from home, but workers complain that the leaner operations make them work longer hours and have less predictable schedules. Workers who took time off outside of their vacation time, which averaged three weeks a year, or holiday and personal time, which reached 14 days a year for the most senior employees, were docked time off.