Rail workers warn of exodus after Congress forces through deal
BY KARL EVERS-HILLSTROM 12/06/22 06:00 AM ET, THEHILL.COM
Railroad workers could leave the industry after Congress forced through a contract that does not provide them any paid sick days, an exodus that would ripple through an economy reliant on freight railroads to transport goods.
The exit of thousands of train conductors and engineers would be felt by major corporations and U.S. consumers alike. It could slow the delivery of food, fuel and online orders while strangling already-shaky supply chains.
The economy was almost upended by a nationwide strike before lawmakers intervened last week to enforce a deal many workers found lacking.
Those who were holding out hope for a strong contract might look for a new job after the deal failed to provide paid sick leave or put an end to strict attendance policies and strenuous schedules that require workers to be on call constantly, rail workers say.
“I don’t think you’ll just see half of the workforce disappear, but you’ll see a good percentage, and we can’t afford for anybody to leave because we’re so undermanned as it is,” said Hugh Sawyer, an Atlanta-based engineer at Norfolk Southern.
Any exodus of workers would only exacerbate staffing shortages brought on by railroads laying off around 30 percent of their workforce over the past six years. That, in turn, has led to exhausted workers and persistent delays and cancellations when demand for shipped products spiked.
Business groups have warned that the disruptions, which are driven by staffing shortfalls, helped fuel inflation.
Sawyer, who serves as treasurer of grassroots rail reform group Railroad Workers United, said that younger workers who place more emphasis on work-life balance will be the first to leave.
“Most of these people live in or around metro Atlanta. The economy’s booming. They will find a job elsewhere,” Sawyer said.
Workers say that some employees could leave as soon as they receive back pay and cash bonuses, which will average roughly $16,000 per person. Railroads will dole out that money within 60 days.
The Association of American Railroads (AAR) said in a statement that carriers hear workers’ concerns and agree that “conversations about work-life balance issues must continue.” The industry group said that railroads’ train and engine workforce has grown 8 percent since January.
“The benefits and compensation packages are part of why that is the case — both of which are seeing historic increases through this deal with average wages and compensation rising to $160,000 over the course of the contract,” an AAR spokesperson said. “Railroading is difficult work, and our employees are compensated accordingly in recognition of that.”
The contract signed into law Friday, negotiated with the help of the Biden administration, provides 24 percent raises over five years and allows workers to take three unpaid days off for medical appointments, a provision that wasn’t included in previous proposals.
But it doesn’t offer any paid sick days, adjust schedules or remove attendance policies that penalize workers for missing time to attend family gatherings or other scheduled events.
“They talk about the money in this contract. It’s just not worth it to have to give up what these people have to give up,” said Jeff Kurtz, a Railroad Workers United member who worked as a locomotive engineer in Iowa for 40 years.
Kurtz said that railway workers might take less money to work factory or trucking jobs that offer consistent hours and are always hiring.
Congress last week overrode four unions that had not ratified agreements with railroads. Those include train and engine workers at SMART-TD, the largest rail union, who rejected the tentative contract last month.
Unions lobbied lawmakers to add seven days of paid sick leave to the deal, while railroads pushed back, arguing that Congress would set a dangerous precedent by modifying the contract.
The House passed the sick leave measure with the support of every Democrat and three Republicans. Just six GOP senators voted for the proposal, dooming its chances in the upper chamber. Sen. Joe Manchin (D-W.Va.) was the only Democrat to vote against it.
“The senators who opposed the measure all have paid sick days, as do their staff. Apparently, they believe the nation’s rail workers are ‘essential’ to the American economy and supply chain, but not essential enough to deserve the same protection as them when becoming ill,” SMART-TD said in a statement following the vote.
Union officials have sought to keep hope alive by assuring workers that they are still pushing for paid sick leave. That could come in the form of another legislative effort or an executive order that requires federal contractors, including railroads, to provide paid sick days.
At the bill signing, President Biden said he would continue to fight for paid sick leave, but didn’t offer specifics on how he would go about it.
“It’s a really good bill lacking only one thing, and we’re going to get that one thing done before it’s all over,” Biden said.
And on Monday, activist investors filed proposals requesting that Norfolk Southern and Union Pacific provide paid sick leave, arguing that the companies must provide the benefit to stay competitive and keep workers safe.
“Focusing on the short term at the expense of workers poses potential risks to the company and the economy,” Kate Monahan, who leads shareholder advocacy at Trillium Asset Management, said in a statement. “As shareholders, we are asking management to reprioritize and take the longer-term view that safeguarding the health and safety of their workers will better position them for the future.”
Paid sick leave would represent a significant consolation prize for rail workers who are fed up with a system that they believe allows railroad executives to ignore their demands.
Railroads and unions engaged in tenuous negotiations for more than three years and remained at a standstill until a Biden-appointed board of experts released contract recommendations in July.
While workers in other essential industries took part in a wave of strikes this year, rail unions must overcome a series of roadblocks authorized by Congress that are explicitly designed to make a walkout difficult, if not impossible, taking away a key source of leverage. That system won’t change anytime soon.
“The federal government inserted itself into the dispute between the railroads and the railroad workers under the premise that it must protect the American economy. Yet, when the federal government makes that decision, its representatives have a moral responsibility to also protect the interests of the citizens that make this nation’s economy work — American railroaders,” Tony Cardwell, president of the Brotherhood of Maintenance of Way Employes Division, said in a statement.
By Kristin Wilson, Paul LeBlanc and Clare Foran, CNN
Updated 1:22 PM EST, Wed November 30, 2022
The House on Wednesday approved legislation to avert a rail shutdown following a grave warning from President Joe Biden about the economic danger posed by congressional inaction.
By a 290 to 137 vote, the House passed the tentative rail agreement that will prevent a rail strike. The vote was largely bipartisan, with 79 Republicans joining Democrats in voting for the bill. Eight Democrats voted against the bill.
The House used an arcane procedure to pass the bill so that it can include language to give railroad workers paid leave, in a separate subsequent vote that progressives had called for. But, because it’s a procedure, the Senate can vote on the original measure without considering the paid leave component and won’t have to send it back to the House.
Without congressional action, a rail strike would have become a reality as early as December 9, causing shortages, spiking prices and halting factory production. It could also disrupt commuter rail services for up to seven million travelers a day and the transportation of 6,300 carloads of food and farm products a day, among other items, according to a collection of business groups.
A freight rail strike could cost the US economy $1 billion in its first week alone, according to a new analysis from the Anderson Economic Group.
As a result, Biden has pushed Congress to “immediately” pass the legislation to avert a shutdown.
The strategy of two different votes could give Democrats cover with the left angry at the lack of paid sick leave without jeopardizing passage of the bill in the Senate. That’s because if they were to add sick leave to the bill implementing the railway deal it would almost certainly cost them critical GOP support in the Senate and could sink the bill.
Calling himself a “proud pro-labor President,” Biden said in his Monday statement, “I am reluctant to override the ratification procedures and the views of those who voted against the agreement. But in this case – where the economic impact of a shutdown would hurt millions of other working people and families – I believe Congress must use its powers to adopt this deal.”
A rail shutdown, Biden warned, would “devastate the economy.”
While Biden said Tuesday he was “confident” a rail strike would be avoided after meeting with the top four congressional leaders, at least two House Democrats – Reps. Cori Bush of Missouri and Jamaal Bowman of New York – have already come out and said they don’t believe the bill goes far enough and needs to include paid leave.
House Speaker Nancy Pelosi told CNN “we’ll be fine” when asked if there’s enough votes for Democrats to pass the legislation, while House Majority Leader Steny Hoyer offered, “We’re counting.”
When pressed on whether he will likely need Republican votes to pass the legislation, Hoyer said “Yeah. We’d like to have Republicans. We think this is going to be a bipartisan vote.”
Uncertain future in the Senate
Once passed, Senate action could occur later this week or next, several Senate sources have told CNN. The Senate is expected to have the votes to break a filibuster on the bill to avert a potential railway strike, the Senate sources also said.
There are likely to be at least 10 Republicans who will vote with most Senate Democrats to overcome a 60-vote threshold.
But any one senator can slow the process down as timing agreements to move along legislation typically require unanimous consent from all 100 members of the chamber.
Vermont Sen. Bernie Sanders, an independent who caucuses with Democrats, tweeted Tuesday evening, “At a time of record profits in the rail industry, it’s unacceptable that rail workers have ZERO guaranteed paid sick days.”
“It’s my intention to block consideration of the rail legislation until a roll call vote occurs on guaranteeing 7 paid sick days to rail workers in America,” Sanders said.
Additionally, several Republican senators said Tuesday they are still weighing whether to back the legislation. Some said they are worried about what might be included in the final version of the legislation.
“We’re going to have look at the particulars of whatever bill might come before us,” said Indiana Republican Sen. Todd Young. “I haven’t seen the legislation.”
Alaska Republican Sen. Dan Sullivan, meanwhile, said he had “to get up to speed” on the issues before deciding. “I’m usually someone who supports the working man on a whole host of issues, but I don’t have a lot of knowledge on the details yet,” he said.
And Sen. Josh Hawley, a Republican of Missouri, also refused to state his position, and pointed to divisions across the aisle. “My understanding is my Democratic friends don’t agree on what needs to be done, so let’s see what happens,” he said.
One member of the GOP leadership, Sen. Deb Fischer of Nebraska, warned a rail strike would be “devastating” to the economy and would “hurt people.” She said she expects to back the bill.
“I think it’s important to see what comes over from the House, and I anticipate I will be voting in in favor of it,” she said. “We do not need to see a strike happen that could have such negative impacts on families.”
Railroad Unions and Companies Reach a Tentative Deal to Avoid a Strike
Excerpted from NYTimes.com, September 15, updated at 9:17AM ET, by Jim Tankersley
President Biden announced the agreement after negotiations brokered by the labor secretary lasted deep into the night.
WASHINGTON — Freight rail companies and unions representing tens of thousands of workers reached a tentative agreement to avoid what would have been an economically damaging strike, after all-night talks brokered by Labor Secretary Martin J. Walsh, President Biden said early Thursday morning.
The agreement now heads to union members for a ratification vote, which is a standard procedure in labor talks. While the vote is tallied, workers have agreed not to strike.
The talks brokered by Mr. Walsh began Wednesday morning and lasted 20 hours. Mr. Biden called in around 9 p.m. Wednesday, a person familiar with the talks said, and he hailed the deal on Thursday in a long statement.
“The tentative agreement reached tonight is an important win for our economy and the American people,” Mr. Biden said. “It is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years.”
Potential Rail Strike Update
US rail workers from two of the largest labor unions are preparing to strike this Friday, September 16—which may cause significant delays and disruptions to supply chains. Please note the following changes announced by Norfolk Southern, Union Pacific, BNSF, and CSX Rail Roads.
- Norfolk Southern will close all gates to Intermodal traffic effective noon local time on Wednesday, September 14, 2022
- In-gates for loaded or empty Intermodal units for rail movement will close at all NS Intermodal terminals.
- Traffic originating at on-dock port facilities and privately owned Intermodal terminals will not be accepted.
- Customers with eastbound interline shipments should contact the originating rail carrier regarding guidelines for the acceptance of traffic at origin.
- Until further notice, out-gates will remain open at all NS Intermodal terminals during normal business hours for customers to pick up units.
- For Norfolk Southern EMP and TMX Customers:
- NS will discontinue filling reservations on equipment effective at 00:01 local time Wednesday, September 14
- Any empty units out-gated after noon local time Sunday, September 11, and until further notice will be charged according to normal per diem schedules
- Customers can return empty EMP and TMX containers to NS terminals as usual until further notice. This process may be modified as terminal conditions require.
Union Pacific Rail Road:
- On Monday, September 12, Union Pacific will begin to secure hazardous and other security-sensitive materials on our property for the safety of our customers, employees, and communities we serve. In addition, we will embargo new shipments of hazardous commodities until those shipments can safely arrive at their destination. We are taking a proactive measure ahead of any potential work stoppages due to an impasse in labor negotiations.
BNSF Rail Road:
- Due to the possibility of an interruption of service when the cooling-off period expires on September 16, we will begin to take steps to manage and secure the shipments of hazardous and security-sensitive materials as early as Monday, September 12.
CSX Rail Road:
- CSX is taking steps to ensure the safety of highly hazardous, toxic by inhalation and poisonous by inhalation (TIH/PIH) materials in the event of a potential rail labor strike. We remain hopeful that agreements will be reached, but to prepare for the possibility of a work stoppage, the company will take action by issuing an embargo on all TIH/PIH shipments and other safety-sensitive freight effective Monday, September 12.
Supply chain breakthrough as German workers and seaports reach agreement
excerpted from porttechnology.org, August 25, 2022
Ports in Germany have struck a landmark collective bargaining agreement with its workers after months of strikes and supply chain unrest.
In the 10th round of collective bargaining with the Central Association of German Seaport Companies (ZDS), the United Services Union (ver.di) achieved a collective bargaining result for around 12,000 employees in German North Sea ports that provides a considerable pay increase.
German ports have continued to suffer from growing congestion from the strikes as the rest of Europe stabilises from the Russia – Ukraine conflict that began earlier this year.
“This is a very good result. Our most important goal was real inflation compensation so that employees were not left alone with the consequences of the galloping price increases. We succeeded in doing that,” said ver.di negotiator Maya Schwiegershausen-Güth.
“This would not have been possible without the extraordinary commitment of our colleagues, who stood up for their goals with warning strikes and demonstrations.”
The ver. di Federal Tariff Commission has already issued a resolution recommendation for the collective bargaining result.
The union will now initiate a discussion process with the members in the companies about the collective bargaining result.
On 5 September, 2022, the ver.di Federal Tariff Commission will then make the final decision on the collective bargaining result.
From 1 July 2022, the wages in full container companies in the corner wage group 6 (including special payment) will increase by 9.4 per cent; in the conventional and general cargo port companies, they increase by 7.9 per cent in the same reference wage group (including special payment).
From June 1 2023, the fees in the will increase by a further 4.4 per cent.
If the price increase rate is higher, an inflation clause comes into effect, which compensates for a price increase rate of up to 5.5 per cent.
In the event of a higher inflation rate, the bargaining parties have agreed on a negotiation obligation, including a special right of termination.
Meanwhile, a major strike is ongoing at the UK’s Port of Felixstowe. The ongoing crisis at the port could last for months as workers threaten strikes until Christmas.
The eight-day strike over pay by over 1,900 workers commenced on 21 August at the East Anglian port, the UK’s largest container gateway which handles over 4 million TEU per year.
UK’s Liverpool Port Could ‘Grind to a Halt’ After Workers Vote to Strike
excerpted from gcaptain.com, August 15, 2022
More than 500 port workers at the Port of Liverpool are set to strike, bringing another one of the UK’s busiest ports to ‘grinding to a halt,’ the Unite trade union announced Monday.
The strike, the timing and duration of which have not yet been determined, comes after workers at Peel Ports-owned Mersey Docks and Harbour Company (MDHC) voted overwhelmingly in favor of the strike in response to an “inadequate” 7% pay raise offer.
“What’s happening at MDHC is another example of why workers in this country have had enough,” said Unite general secretary Sharon Graham. “Once again, a profitable company controlled by a tax-exiled billionaire is refusing to give its workers a cost-of-living pay rise. Our members at MDHC have Unite’s complete backing and support in these strikes for a fair pay rise.”
Maintenance engineers at MDHC could also vote to strike over the same pay offer, with an industrial ballot open starting today until August 24.
Strikes by either group of workers will have a severe impact on both shipping and road transport in Liverpool and the surrounding areas, Unite said.
“The responsibility for Liverpool container docks grinding to a halt will lie firmly with MDHC. Our members are struggling with rising living costs, yet MDHC, which is awash with cash, puts forward a completely inadequate offer. It needs to come back with a deal that meets our members expectations,” said Unite national coordinator Steven Gerrard. The latest comes after more than 1,900 workers at the Port of Felixstowe, the UK’s busiest container port, are set to strike for eight days later this month after failing to reach a pay deal with Felixstowe Dock and Railway Company, a unit of CK Hutchison Holdings. The workers there are also represented by Unite.
Hundreds of workers at Liverpool port vote to strike over pay
excerpted from reuters.com, August 15, 2022
LONDON, Aug 15 (Reuters) – More than 500 dockworkers at the Port of Liverpool, one of Britain’s largest container ports, have voted in favour of strike action over pay and working conditions, the Unite trade union said on Monday.
The industrial action would mean the port would be “grinding to a halt”, the union said, though it didn’t provide details on the start or duration of the strike.
The workers at Mersey Docks and Harbour Company (MDHC), which is part of Peel Ports, the second largest port group in the country, voted 99% in favour of the strike.
“Our members at MDHC have Unite’s complete backing and support in these strikes for a fair pay rise,” Unite general secretary Sharon Graham said.
Rising prices and stagnant real wage growth has seen a wave of strikes across Britain with rail, legal, aviation and refuse workers voting to take industrial action. read more
Peel Ports said it had offered a 7% increase to basic pay on top of a 4.5% pay increase last year and other improvements to shifts, sick pay and pensions.
The Bank of England forecasts inflation in the UK will reach 13% this year and Unite said this would result in a real terms pay cut for workers.
Peel Ports urged the union to keep talking to resolve the dispute.
Did you know:
General insurance policies rarely cover marine cargo claims. You need a marine cargo insurance policy, or you may need to purchase marine cargo insurance on each shipment.
Many carriers will not take responsibility for loss or damage if a warehouse signs off clean on a POD. It is critical, before signing a POD, to note the condition of the cargo. Claims are usually time-barred, unless filed within a few days (standards vary by carrier). So alert your carrier to possible damage immediately. The best way to do this is by signing the delivery receipt notating damage! And be specific, for example,
8 glasses broken, 10 boxes crushed (Make ensure that you have the correct boxes or pallet count).
Every Shipper Needs Cargo Insurance
Global trading involves risk; however, marine cargo insurance coverage minimizes your financial risk. Don’t leave your livelihood up to chance!
Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you depend on the carrier to cover losses, their responsibility is very limited (by law), as follows:
Ocean Carriers $500 per shipping unit (a shipping unit may be defined as one ocean container)
Air Carriers $9.07 per pound
Truckers $0.50 per pound
The cargo insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative for your free quote.
Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protect your investments by insuring your goods, and provide peace of mind.
According to internationally accepted trade terms, referred to as Incoterms, suppliers selling CIF are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to control the selection, and thereby, the quality, of insurance coverage. Foreign suppliers and their forwarding agents often add on additional fees to the insurance costs. Those added fees inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from BOC International.
Additionally, when other parties arrange insurance, you run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions.
At least make certain the insurer being used has a favorable financial rating supplied by a respected financial rating service. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).
Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.
Are you familiar with GENERAL AVERAGE?
There are a number of notable cases of damage or loss to a vessel, with many resulting in General Average! More recent examples include:
- Ever Forward, March 2022
- Ever Given, April 2021, stuck in the Suez Canal
- Yantian Express, January 2019
- APL Vancouver, January 2019
- ER Kobe, February 2019
- Sincerity Ace – January 2019
- Maersk Honam – March 2018
- Maersk Kensington – March 2018
- Hyundai Auto Banner – May 2018
- MOL Prestige – February 2018
- Caribbean Fantasy – June 2018
Ever Given – The claim process is still ongoing. The average time a case can take is two to seven years.
General Average claims can include a long list of expenses, including damage to the vessel, re-floating efforts, towing and salvors. Egypt alone believes it is owed more than $1 billion in the Ever Given case.
General Average – Background
- Basic principle – “that which has been sacrificed for the benefit of all shall be made good by the contribution of all”
- Applies to maritime claims only.
- Is declared by the captain when there is imminent danger to the vessel, voyage or crew.
- You are contractually obligated, via the Bill of Lading, for unknown and undetermined costs.
How does General Average work?
- Value of the voyage is determined (vessel value plus value of all cargo on the vessel).
- Participation in costs is determined by the percentage that the value of your cargo bears to the overall value of the voyage.
- The loss amount is determined, and participation percentage is applied, to the loss amount, to determine security deposit.
- Shipper/Consignee or their cargo insurer pay twice – first for the initial contribution, then for a bond covering future adjustments to that estimate.
- Freight may not be released until ALL deposits/payments have been received by all parties involved.
Difficulties of preventing and extinguishing fires on the open sea, which increases the likelihood of a General Average claim, include:
- Ships are larger with more varied cargo.
- Crew are ill equipped to deal with these fires.
- Fire-fighting tugs are often days or weeks away.
- Prevention is difficult, with rising problems with mis-declared cargo.
- IMDG Code is evolving to impose stricter rules on dangerous goods (DG.)
Problems Facing the Industry
- Stricter rules on Dangerous Goods cargo will lead to higher costs and more incentive on the part of shippers to avoid proper declarations
- Ship owners and shipbuilders need to improve fire-fighting capabilities with CO² systems being shown to be inadequate – cost benefit analysis
- National Cargo Bureau in NY found in 2017 that of 1,721 stowage plans inspected, 20% showed errors with DG
General Average will (probably) never go away, so, keep yourself informed:
- Awareness across all business units that losses & delays are part of any supply chain. Mission-critical shipments need more risk analysis to determine transport mode.
- Understanding of what to do when General Average occurs. This is best led by your cargo insurance provider meeting with your ‘team,’ not just the risk manager or CFO.
- Have a contingency plan or at least an understanding of how the event will unfold.
MAKE SURE YOU ARE COVERED! Ask the questions. Do not assume.
Port of Oakland Hit by Truckers Protesting
excerpted from Bloomberg.com, July 20, 2022
Management at the Oakland International Container Terminal decided to close operations today due to the independent trucker protest, and the port’s three other marine terminals are effectively shut down for trucks, port spokesman Robert Bernardo said. Some vessel-labor operations are under way.