A tentative deal to at least temporarily prevent a freight rail labor strike was reached on Sept. 15. Rail workers threatened to a strike or lockout in October or November, calling for wage increases and improved quailty of life, such as sick leave and time off.

Three unions representing 60,000 active Class I railroad workers have said they will not strike as union members consider a deal that would include as 24% wage increase over a five-year period, with an immediate wage increase of 14% once compounded.  The deal also calls for annual lump sum bonus payments totaling $5,000 and no increases to insurance copays and deductibles, according to a statement from union leaders.

Workers are not only asking for pay increases, but their key demand is to have the ability to take sick leave and to take time off.

“For the first time ever, the agreement provides our members with the ability to take time away from work to attend routine and preventative medical, as well as exemptions from attendance policies for hospitalizations and surgical procedures,” according to a statement by Jeremy Ferguson of SMART Transportation Division and Denise Pierce of the Brotherhood of Locomotive Engineers and Trainmen.

Bargaining for a contract started in January 2020. The tentative agreements follow Aug. 16 recommendations from the Presidential Emergency Board. 

This is a win for the economy and for the American people.

Rail workers will get better pay, improved working conditions, and peace of mind around their health care costs.

I thank both the unions and rail companies for negotiating in good faith. https://twitter.com/secmartywalsh/status/1570338865403117569

— President Biden (@POTUS) September 15, 2022

What Would a Rail Strike Mean for the Trucking Industry?

While trucking and rail companies compete for ground freight, trucking is the largest customer of the rail industry and trucks deliver the last mile of virtually every product that rail transports, explained American Trucking Associations President and CEO Chris Spear in a letter sent to Capitol Hill earlier this month.

“Both industries rely on one another to keep our supply chains healthy and efficient,” Spear wrote.

The Intermodal Association of North America reports that in 2021 alone, transportation companies moved 18,435,249 intermodal units

“Idling all 7,000 long distance daily freight trains in the U.S. would require more than 460,000 additional long-haul trucks every day, which is not possible based on equipment availability and an existing shortage of 80,000 drivers,” Spear wrote. “As such, any rail service disruption will create havoc in the supply chain and fuel inflationary pressures across the board.”

What’s Next?

The Brotherhood of Locomotive Engineers and Trainmen (BLET), a Division of the Rail Conference of the International Brotherhood of Teamsters, and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) will begin the process of submitting the tentative agreement to a vote by the membership of the union.

If the union members reject the deal, they could still decide to move to a strike or lockout.