The Association of American Railroads said it estimates that a potential rail-freight strike could cost the United States nearly $2 billion a day.
Their warning comes as leaders of two major labor unions say they’re ready to go on strike if an agreement is not reached by Friday night.
Meanwhile, on Wednesday, Labor Secretary Marty Walsh met with representatives from both sides as the Biden administration tries to head off a strike. The White House has acknowledged that a strike could challenge the nation’s supply chain.
RELATED KGUN 9 TEAM COVERAGE
- EXPLAINER: Rail strike would impact consumers, businesses
- 1 rail union rejects deal, 2 accept ahead of strike deadline
- Rail operators say US could lose $2 billion a day during potential strike
- From carmakers to refiners, industries brace for rail strike
- Amtrak to cancel all long-distance trains ahead of potential rail strike
"We're going to be very honest, a shutdown would have a tremendous impact on our supply chains,” White House press secretary Karine Jean-Pierre said. “As you all know, it's going to have a ripple effect into our overall economy on the American family. A shutdown is not acceptable. That is not something that we want it risks harming families at risk farming, harming businesses and whole communities.”
One of the unions, the International Association of Machinists and Aerospace Workers, rejected a contract offer, but agreed to hold off going on strike until Sept. 29.
"IAM freight rail members are skilled professionals who have worked in difficult conditions through a pandemic to make sure essential products get to their destinations," the union said. "We look forward to continuing that vital work with a fair contract that ensures our members and their families are treated with the respect they deserve for keeping America’s goods and resources moving through the pandemic."
Rail operators say a strike would cause 7,000 railcars to idle. Those railcars would leave behind items such as parts, cars, food and other products. They say the result would be lost jobs and retail product shortages.
SMART-TD and BLET, two of the largest freight labor unions, said they are prepared for a potential strike to begin at the end of Friday.
“It is the rail carriers that refuse to reach an acceptable agreement,” the unions said in a statement. “In fact, it was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our Unions.”
The Biden administration got involved during the summer by getting the sides to hold off on a strike during a 60-day cooling-off period. That period expires at the end of the day Friday.
During that time, the Presidential Emergency Board came up with a recommended contract for the sides, which included a 24% compounded wage increase during the five-year period from 2020 through 2024, with a 14.1% wage increase effective immediately for union employees. The retroactive pay increase would provide an average of $11,000 per employee in back pay.
The recommendation also would give employees additional paid time off and cap employee insurance contributions at 15%.
The Association of American Railways said it is ready to reach union agreements based on the Biden administration’s recommendations. Rail operators reached agreements on Sunday with three major rail unions but said the two remaining unions are making demands beyond what Biden’s arbitrators recommended.
