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Industry Applauds Senate Passage of Rail Resolution

A bill forcing the remaining rail workers involved in a multi-year contract dispute to take up a labor agreement that staves off a national rail shutdown is expected to move to President Biden’s desk after the Senate voted Thursday afternoon in favor of the legislation. 

Retailers and apparel companies voiced relief at the Senate’s quick passage, which came a day after the House approved the joint resolution. 

American Apparel & Footwear Association (AAFA) president and CEO Steve Lamar applauded Congress’s effort to stop the strike and pushed on the president to quickly sign the measure into law. 

“Improving the resiliency of our supply chains remains of the utmost importance,” Lamar said Thursday. “We must protect American companies from price gouging in the global shipping industry and we must fix fundamental issues that continue to cause delays and bottlenecks. Further, it is imperative that all logistics stakeholders continue to work together to support modern and efficient systems, and ensure there are safe and responsible workplaces that power them.” 

The National Retail Federation (NRF) and Retail Industry Leaders Association (RILA) offered similar takes in breathing a sigh of relief with the Senate’s vote. 

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“Today, Senate leaders recognized just how vital our nation’s rail system is and voted to keep the country’s supply chains and our economy moving,” RILA director of government affairs Sarah Gilmore said. 

“A nationwide rail strike at this juncture would have had devastating consequences for our economy, and exacerbated inflation for American families,” NRF president and CEO Matthew Shay said. “We are grateful for the swift action in Congress this week to implement the tentative agreement, and we look forward to President Biden’s immediate signature to safeguard smooth and stable rail operations.” 

The tentative agreement is based off recommendations made to carriers and unions by the Presidential Emergency Board (PEB) established by President Biden earlier this year. The PEB report, released in August, suggested a 24 percent compounded increase in wages across the contract’s five-year run through 2024, along with the payout of $5,000 in bonuses across that same span of time. 

Eight of the 12 unions involved in the current round of negotiations voted to ratify that deal, while the remainder rejected the contract and had until Dec. 9 to reach new agreements. 

Senate lawmakers quickly held three consecutive votes Thursday to tackle the nearly three-year-old dispute, passing the joint resolution forcing adoption of the tentative agreements in a vote of 80-15.

Senators also weighed two related amendments, neither of which successfully passed. 

The first of those amendments, by Sen. Dan Sullivan (R, Alaska), would have given railroads and unions 60 more days to continue negotiations and was voted down 26-69. A second amendment, backed by Sen. Bernie Sanders (I, Vt.), afforded workers seven paid sick days. That proposal was not agreed to, with the number of lawmakers voting in favor of the amendment short of a supermajority by eight votes. 

Business leaders had voiced concerns about supply chain congestion as fears of a rail shutdown mounted. 

AAFA said as much in a letter to House lawmakers Wednesday as it noted some companies looking to get ahead of a possible strike had begun turning to transportation alternatives, such as trucking and “exacerbating those strained links in our supply chains.” 

Railroads move about 30 percent of the country’s apparel, footwear and accessories, according to AAFA. 

U.S. rail cargo was up 8 percent over the week before Thanksgiving compared to the average for the year-ago period, according to supply chain visibility software maker FourKites

Rail delays stood at about 23 percent Nov. 27. That’s down from 37 percent, when the logjams were at their highest in December of last year, according to FourKites.  

The failed Sanders-backed amendment kicks the can further down the road on issues likely to materialize in future labor talks.  

Peter DeFazio (D, Ore.), chair of the House Committee on Transportation and Infrastructure, blasted the railroads Wednesday for allowing the negotiations to drag on for as long as they have by not agreeing to the paid sick time off amid high CEO pay, along with the awarding of shareholder dividends and stock buybacks in more recent years. 

“In implementing PSR [precision scheduled railroading], the seven Class 1 railroads have cut their workforces so deeply—by nearly one-third—that it has significantly impacted service,” DeFazio said. “While the railroads were dithering on their contract negotiations, railroad shippers, including agricultural, energy and construction industries—have all attested to how these workforce impacts have contributed to delayed shipments, disruptions to business and extra shipping costs that get passed on to consumers.” 

SMART-TD, one of the largest of the unions that rejected the tentative agreement, also took aim at the PSR issue, an operations concept aimed at trimming costs and boosting efficiencies. PSR has been widely criticized by unions and some regulators as having led to overly lean workforces and delays for shippers. 

SMART-TD supported the paid sick leave amendment, but also called on lawmakers Wednesday to offer “relief from the damning effects of operational changes made by the railroads over the last five years.” Further, it called on Congress to legislate the PSR issue and “reverse the devastation of Precision Scheduled Railroading.”