On July 15, President Joe Biden blocked a freight railroad strike in Omaha, Nebraska. This strike would disrupt the already fragile supply chain by delaying the shipment of goods for at least 60 days.
To combat this, President Biden appointed a board of arbitrators, the Presidential Emergency Board, to help the dispute with contract building and negotiation mediation.
Why did Biden block the strike?
According to Biden’s executive order, “These disputes threaten substantially to interrupt interstate commerce to a degree that would deprive a section of the country of essential transportation service.”
This block will keep 115,000 rail workers on site while the board of arbitrators works on a set of contract recommendations for both the railroad and the 12 unions involved.
The PEB consists of two members and one chairman, once they give the unions and railroad their recommendations, both parties will need to come to an agreement within 60 days, or else the United States Congress will step in.
What would Congress do?
If needed, Congress would vote to impose their own terms and potentially other actions, this is to prevent a strike which would prevent the shipment of goods and raw materials in North America.
Many union members and rail networks support the PEB and have faith that they will be able to solve the two-year-long issue.
Union Pacific, BNSF, CSX, Norfolk Southern, and Kansas City Southern are among the many railroads and unions that have expressed optimism for the PEB finding a solution.
Chris Spear, President, and CEO of the American Trucking Association sent President Biden praise for taking action.
Spear goes on to say, “We commend President Biden for taking decisive action today to avert a strike and help ensure the rail sector keeps moving freight at this critical time for our economy by appointing a Presidential Emergency Board,” said Spear.
“In order to move past our supply chain challenges and reduce the inflationary pressure that’s hurting American families, we must continue to steer clear of the kinds of avoidable, unnecessary disruptions to the movement of freight that this strike would have caused.”
What are the unions requesting?
Union workers are asking for increased wages due to record high inflation and for railroad networks to not cut the two-person train crew to one person as this would vastly increase the workload for the individual. This would also make it significantly more difficult to apply for time off due to increased workload and strict workplace rules.
Union workers expected a raise when they found out the railroad recorded profit in recent years due to cutting 1/3 of their employees over the past 6 years.
On the other end of the argument, railroads said the double-digit raises they are offering over the course of a 5-year contract are more than fair based on what other companies offer.
Agreeing to a new arrangement could result in the railroads hiring more people, which they say they are struggling with. In order to keep up with increased demand, they would need to hire hundreds of new employees.
Due to increased profit, and increased inflation, it only makes sense to increase the wages of these workers. While a double-digit raise over five years is nice, a more immediate fix is needed. For more updates, subscribe to TopMark Funding.
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