President Biden announced a tentative railway labor deal was reached this morning to avert a union strike.
“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned,” Biden said.
The deal comes as two railroad unions were poised to strike at midnight. That would have been detrimental to the economy, shipments on food, fuel, passenger traffic and freight rail lines.
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Amtrak had already canceled many distance trains this week in anticipation of the strike. Since the agreement was announced, they have been working to restore routes quickly.
Railroads are the most cost-efficient way to transport agricultural products, and Indiana is the eight largest agricultural exporter in the U.S.
“Farmers that are transporting commodities- so corn, soy beans, processing tomatoes, that can kind of have a commodity transported by rail transportation, they are very concerned,” agricultural economist Shellye Suttles said.
If railroads could not transfer products, producers would likely turn to trucking for transport. But that would likely lead to supply chain issues and shortages, because trucks cannot transport as much product as railroads.
“Rail cars can hold about 200,000 pounds worth of product and a truck is only legally allowed to hold about 40,000 pounds,” Shuttles said. “For every one rail car, it takes from three to five trucks to be able to transport that same product.”
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She said had Biden not stepped in quickly, consumers would likely have experienced price increases in stores.
“We want the rail workers to be able to, you know, have an improved quality of life from their efforts,” Shuttles said. “But also, you know, households are really struggling right now with inflation.”
The tentative agreement is a five-year deal that includes 24% raises and $5,000 in bonuses, with railroads agreeing to improve working conditions. It will be passed to union members for a vote in several weeks.
