September 28, 2022 / By Erika / Shipping • Transport / 0 Comments
While a provisional agreement to try and avoid a halt of service from railroad strikes has been announced, the impact of the struggling sector hasn’t fully dissipated. The nation’s supply chains have been extremely fragile since the onset of the COVID-19 pandemic, and the possibility of a complete railway strike would be a devastating hit to the already volatile economy.
So, what’s the deal?
Railway workers have threatened to strike over unfavorable working conditions such as being disciplined for taking time off – even if it is for doctor appointments and care. They also claim they are overworked and underpaid due to high inflation. The tentative deal was negotiated between the Labor Secretary and the union representing engineers and conductors. It would benefit the other rail union workers as well if the agreement takes effect. Though negotiations are still happening, the new contracts would provide rail workers:
- a 24% wage increase during the five-year period from 2020 through 2024, with the average rail worker salaries will reach $110,000 by the end of this five-year deal in 2025
- an immediate payout on average of $11,000 upon ratification and $5,000 in bonuses in the deal that is retroactive to 2020
- an additional paid leave day a year plus unpaid time off for doctor’s appointments or medical procedures without being penalized under their attendance rules
- workers will have to pay a larger share of their health insurance costs, but their premiums will be capped at 15% of the total cost of the insurance plan
What will this mean for the industry?
The unions are submitting the tentative deal to their members for a vote. And the result will likely be revealed closer to November around midterm elections. However, one of the other rail unions could still organize a work stoppage in the meantime. If the unions accept this proposed deal then we can avoid a strike.
Conditions are improving, such as the U.S. ports having cleared most of the back-logged ships. But there are still some serious supply chain disruptions to contend with, such as high fuel and food prices and a shortage of supplies. The economic issues, back-log, and staff shortages are still happening and causing the exhausting conditions the rail workers are contending with.
As always, Westgate Global Logistics will keep you informed on industry issues. We encourage you to evaluate your business and if you have any questions, CONTACT US to discuss your transportation needs.