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Averted railway strike underscores fragile state of supply chains in Pennsylvania

csx_freight_train_railroad.jpg
Patrick Semansky
/
AP
CSX Corp. is among the railroad operators in contract discussions with rail worker unions. Others include BNSF Railway Co., Norfolk Southern Corp., and Union Pacific Corp.

A tentative labor agreement between freight rail operators and unions brought relief to Pennsylvania industries Thursday. Tens of thousands of rail workers had threatened to walk off the job Friday, but they avoided that outcome following talks that dragged through the night Wednesday.

“We're definitely very thankful … that at least temporarily… a strike has been avoided,” said Bailey Thumm, a federal affairs specialist at the Pennsylvania Farm Bureau. Union members still must ratify the deal before it is finalized.

If they were to strike, operations would unravel at the nation’s farms, Thumm said. Farmers rely on trains to ship finished goods to market and to obtain necessary supplies.

“If they don't have … fertilizer to treat fields, grain to feed livestock, chlorine to sanitize food processing equipment or lumber for building materials, their operations really just go downhill from there,” she said. “They really need the railways to operate cost effectively, timely, and also efficiently.”

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In the hours before the tentative agreement was brokered, David Taylor, president and CEO of the Pennsylvania Manufacturers’ Association, worried a work stoppage would cripple his industry.

“You would see factories shut down just because if you can't get the components or raw materials, you can't build – you can't work. And you have to shut things down and lay people off,” he said.

“We already have had instances where ports have gotten backed up, and a [rail worker] strike would make that [disruption] much worse,” he added, referring to supply chain bottlenecks that have persisted amid the COVID-19 pandemic.

Contract talks between major rail carriers and labor unions date back to late 2019, when the previous agreement came up for renewal. The negotiations broke down last month, triggering a federally mandated 30-day “cooling off” period that was scheduled to end Friday. The work stoppage could have begun at that point.

Leading up to Thursday's deal, labor unions that represent the bulk of the 115,000-member workforce had demanded that the industry address their concerns about long, unpredictable hours and strict time-off policies. The new agreement allows employees to attend medical appointments without facing penalties. It also gives them an additional paid day off while raising wages by 24% from 2020 through 2024.

President Joe Biden celebrated the tentative agreement in a statement Thursday. Federal labor officials led emergency meetings Wednesday to avert a strike, and the White House had explored alternative modes of shipping to limit the impact of disruptions in the nation’s freight network.

The options were limited, however. Truck drivers remain in short supply, and Mary Ann Bucci, executive director of the Port of Pittsburgh Commission, noted that trains usually take goods transported by river to their final destination. Established by the Pennsylvania legislature, the commission advocates for funding to promote the commercial use of 200 river miles across 12 southwestern Pennsylvania counties.

“In a lot of cases, people view barge [as] competing against rail when really it’s just part of the whole intermodal process, and they all need to work together,” Bucci said.

Trucks moved more than half of the freight tonnage in southwestern Pennsylvania in 2011, according to the latest statistics from the commission. Inland waterways accounted for about one-sixth of the tonnage, and rail made up one-quarter, the commission estimated.

In agriculture, neither trucks nor barges can substitute for freight trains, the president of the American Farm Bureau Federation, Zippy Duvall, said in a statement Wednesday.

“Trucks can only move a small percentage of grain and other products typically transported by rail, and river transport is only an option for certain geographic areas,” he said.

But farms have struggled over the course of the pandemic with rising rail transport costs and slower delivery times. Service has suffered due to a shortage of workers across transportation.

Thumm of the Pennsylvania Farm Bureau said the national farm bureau supports a Democrat-sponsored bill in the U.S. House that would expand the federal Surface Transportation Board’s oversight over the rail industry. Introduced last month, the proposal would empower the board to freeze shipping rates during rail emergencies. The American Association of Railroads, which represents major carriers, opposes the legislation as promoting an “unbalanced regulatory framework” that would limit revenues the industry invests in rail development.

Bucci predicted that, without Thursday’s agreement between rail operators and unions, a work stoppage would have caused especially severe hardship for the energy industry. Coal accounted for the largest share of freight traffic through the Port of Pittsburgh in 2020, followed by sand and gravel, limestone, gypsum, and diesel and other petroleum fuels.

Consumers would have felt the effects of a strike, Bucci said, partly because higher energy costs would have trickled down to them.

In addition, she said, “You look at a train that goes by, there's a lot of containers on them. Those containers are coming in from the Far East. They carry products. They carry clothes. They carry school supplies and everything you see in your Target [and] Walmart.”

The once-looming strike had forced Amtrak to cancel long-distance trains, such as the route between Pittsburgh and Washington, D.C., on Wednesday. But on Thursday morning, the operator said it was working to restore service quickly.

An-Li Herring is a reporter for 90.5 WESA, with a focus on economic policy, local government, and the courts. She previously interned for NPR Legal Affairs Correspondent Nina Totenberg in Washington, DC, and the investigations team at the Pittsburgh Post-Gazette. A Pittsburgh native, An-Li completed her undergraduate studies at the University of Michigan and earned her law degree from Stanford University. She can be reached at aherring@wesa.fm.