The situation is getting off tracks 🚉

U.S. railroad delays have been a growing problem for shipping agricultural goods all year. The situation between rail carriers and workers is tense, labor discussions are ongoing, and the grain industry is concerned about a possible labor stoppage.

• Rail carriers point out how severely impacted they’ve been by the situation and how tough it is to get labor back up to speed. 
• Meanwhile, rail workers are placing the blame on the railroads, saying there’s a culture of profits over safety, customer service, and the lives of railroad workers – which is now exposed.

The conversations between carriers and workers that began in 2020 have involved nearly 115,000 union rail workers and more than 30 railroads. 

• Union Pacific signaled in July that the two sides were still far from reaching an agreement on what is an appropriate settlement on wages.

The White House-appointed Presidential Emergency Board (PEB) released a recommendation this week as part of the ongoing collective bargaining process: both sides have 30 days to accept them – if they don’t, then rail workers are allowed to go on strike as of September 16.

• A stoppage in mid-September would be at the height of Midwest harvest. 
• The biggest takeaway from the recommendation is a 24% wage increase over five years for rail labor, which is a middle ground between workers and rail carriers.

While workers can legally go on strike, Congress can intervene by passing a bill prohibiting a lockout – as it has before. It is hoped that Congress will exercise its power should it come to that, since stopping the railroads would be terrible for the agricultural economy.

• It’s expected that rail delays will last another year, and some feed users could run out of feed since they’ve already been reporting being days away from that scenario. As it is, the grain industry is already not in a good spot with respect to rail transportation.