US railroad union negotiations and logistics bottleneck concerns

 In the United States, 'railroad' or 'truck' is used to move import and export cargo from port to inland and from inland to port. In particular, in the case of railroads, it is a very important means of transport because it can transport a large number of cargoes at once.

 As major railroad unions in the United States reject a tentative labor-management agreement, fears are growing that the entire U.S. will experience supply chain disruptions caused by rail strikes.

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1. Background

 On September 15, the freight railroad union and management reached a tentative settlement after negotiating a 20-hour marathon one day before a large-scale strike. The agreement must be ratified by the members of the 12 freight rail unions for final approval.

 The provisional agreement includes recommendations from the Presidential Emergency Committee (PEB) appointed by President Biden of the United States, increases wages by 24% by 2024, and provides a total of $5,000 (approx. 708 million) as a bonus.

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2. Current status of railway union negotiations

 

Looking at the current situation of negotiations with a total of 12 railway unions,

 

6 labor unions: approval of the agreement through union member voting

3 labor unions: The agreement cannot be approved through union member voting. There is a plan to renegotiate and re-vote union members on the renegotiation proposal.

3 labor unions: union member voting/re-voting scheduled to close by mid-November

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3. Prospect

 To prevent a union strike, 12 unions representing 115,000 railroad workers, including BRS and BMWED, must all agree to the provisional agreement.

With the opposition of some unions, railroad operations in the United States are likely to be suspended as early as November 19th.

 

 As rail operation accounts for 30% of freight transportation in the United States, there are concerns that a strike could lead to a logistical turmoil.

The National Railroad Association previously estimated the economic loss from rail strikes at an average of $2 billion per day (about 2.8 trillion won).

The union leadership said that the lack of paid sick leave in both unions, which had rejected the deal, was an impact. The labor-management agreement agreed to pay sick leave unpaid.

 

 However, even if the railroad labor and management cannot reach an agreement, it is judged that there is a high possibility that the parliament will intervene to prevent the strike. Nevertheless, progress should be carefully monitored.

 

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