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Freight rail strike threatens supply chains, prompting White House planning

Federally mandated cooling-off period ends Friday, opening possibility of nationwide strike or lockout

One issue holding up an agreement is attendance policies that penalize workers for going to routine doctor visits or dealing with family emergencies. (Shafkat Anowar/AP)

A national railroad strike could derail critical deliveries of chlorine to wastewater treatment plants and coal to utility plants, among other potentially crippling disruptions, prompting senior White House aides on Tuesday to review contingency options for protecting the nation’s drinking water and energy supply.

White House aides are looking at how to ensure essential products carried by rail — such as food, energy and key health products — could still reach their destinations, even in the event of a strike. Senior officials have looked at how highways, ports and waterways can be used to offset any damage caused, while also talking to top officials in the shipping, freight and logistics industries.

President Biden was briefed on the matter Tuesday morning, after he called the carriers and unions on Monday to press them to accept a deal, a White House official said. Senior officials at the White House are now leading daily meetings with the Departments of Agriculture, Transportation and Energy and other top agencies about how to mitigate the impact. Biden aides in particular are working to ensure that hazardous materials carried by rail are safely transported without hurting workers. The White House actions were described by multiple people with knowledge of the matter who spoke on the condition of anonymity to describe internal planning.

Administration officials have also been in regular contact with Greg Abel, the CEO of Berkshire Hathaway Energy, while trying to find a solution. Berkshire Hathaway owns BNSF, one of the largest freight railroad networks in North America.

Negotiations between the carriers and unions are ongoing, and a deal could emerge at any point.

At issue is a dispute between railway carriers and two unions, representing 57,000 conductors and engineers, over attendance policies. A federally mandated cooling-off period ends Friday, which opens the possibility of a strike, if employees refuse to go to work, or a lockout, if the carriers refuse to let workers do their jobs.

“We’re not that far apart in negotiations,” said Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen, one of the unions that has not reached a deal. He said the carriers BNSF and Union Pacific are holding up negotiations.

In the meantime, some freight carriers have begun limiting services, suspending hazmat shipments and parking trains in what appears to be preparation for a lockout, according to union officials and labor experts. Amtrak, which carries passengers on freight lines, on Monday canceled some long-distance routes, ruining travel plans for hundreds of passengers.

Amtrak cancellations, passenger frustrations grow amid strike threat

Jessica Kahanek, a spokesperson for the Association of American Railroads, a freight rail industry group, said that the carriers “are not planning a lockout on Friday if ongoing negotiations remain unresolved.”

Biden appointed an emergency board in July to mediate the dispute, following two years of negotiations between six of the largest freight carriers and 12 unions that represent railroad workers. Nine unions have reached tentative agreements with the carriers based on the board’s recommendations, leaving the two largest unions without a deal in place. A smaller union, the Brotherhood of Railroad Signalmen, struck down a tentative deal with the carriers on Monday night and has returned to the bargaining table.

Amtrak cancels some long-distance trips as freight strike threat looms

Contract negotiations on Zoom between BLET, the SMART Transportation Division and the rail carriers went late into the day on Monday, without the parties reaching a deal, labor officials from both unions said.

The most important issues holding up an agreement are some of the largest carriers’ points-based attendance policies that penalize workers, up to termination, for going to routine doctor visits or dealing with family emergencies. Conductors and engineers say they do not receive a single sick day, paid or unpaid.

The National Carriers’ Conference Committee, which represents the railroads in negotiations, has denied that workers are without sick time, and it has said that its ability to determine attendance policies is necessary to ensure that enough train operators are available to work amid labor shortages.

“You may have heard from labor that they get no sick days or paid time off. This is false,” Kahanek said, noting that some workers have a supplemental sick-leave benefit, and can take time off for any reason, as long as they maintain a reasonable level of overall availability under carrier attendance policies.

While the unions said they have watered down some of their proposals, including abandoning requests for paid sick days, they remain steadfast that members should be allowed to attend routine medical appointments without jeopardizing their employment. They said they are willing to accept a contract that addresses these concerns and are ready to strike if the carriers do not budge. As of Tuesday morning, the carriers had not made any counterproposals, the two unions said.

As U.S. rail strike looms, White House aides scramble to avert crisis

Two of the largest rail carriers that mainly operate in the Western United States — BNSF and Union Pacific — are the companies with the points-based attendance policies. More than 700 BNSF employees have quit since it rolled out a points-based policy in February. Workers can be terminated if they run out of points, even in the case of a family emergency. Missing work on certain high-impact days, or planning ahead for a single doctor visit, can result in workers losing half or more of their allotted points.

“They have refused to accept our proposals,” said Pierce, president of BLET. “The average American would not know that we get fired for going to the doctor. This one thing has our members most enraged. We have guys who were punished for taking time off for a heart attack and covid. It’s inhumane.”

One of the things working against the unions is a slate of recommendations by Biden’s presidential emergency board. The panel came up with the guidance last month, intended to be a compromise for both parties. The recommendations include a 24 percent raise from 2020 to 2024 and bonus increases, but they left out the union’s proposed changes to the carriers’ attendance policies, drawing ire from workers.

The National Railway Labor Conference, the association representing freight railroad carriers in negotiations, has used the board’s recommendations to bolster the argument that it does not need to make changes to its attendance policy, noting the board “expressly rejected these proposals” and that it is “willing to accept every aspect of [the board’s] recommendations.”

Union leaders say Biden’s appointed board underestimated the importance of these workplace policies for their members.

“Living the way we live is absolutely brutal,” said Jared Cassity, a conductor and the national legislative director at SMART Transportation Division. “Our folks are working sick and tired because they can’t take a day off.”

With the strike looming, national retailers have been preparing for delayed inventory and increased costs, supply chain experts say. Over the past few days, some of the nation’s largest retailers have been preoccupied with finding alternative ways to move inventory to the already overcrowded trucking sector.

“It’s causing great stress,” said John Haber, the chief strategy officer at Transportation Insight, a supply chain consulting company. “The problems have already started. … The dominoes are already in place.”

Retailers that have been dealing with inflation, excess inventory and supply chain bottlenecks are now preparing for additional costs that will eventually trickle down to consumers, Haber added.

Jaclyn Peiser and Brady Dennis contributed to this report.

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