The White House on Tuesday made contingency plans seeking to ensure deliveries of critical goods in the event of a shutdown of the U.S. rail system while again pressing railways and unions to reach a deal to avoid a work stoppage affecting freight and passenger service.
The push comes as Congress is feeling pressure to step in to avert a labour disruption that could occur as early as Friday if no deal is reached, with railways saying a shutdown could cost the U.S. economy US$2-billion a day. U.S. passenger railway Amtrak on Tuesday began cancelling trains on four long-distance routes and warned of further service cuts.
The White House is working with other transportation modes including truckers and air shippers “to see how they can step in and keep goods moving in case of a rail shutdown,” a White House official told Reuters, speaking on condition of anonymity.
The official said the White House is holding daily interagency meetings to assess “what supply chains and commodities are most likely to face severe disruptions, and the emergency authorities available to keep goods moving.”
Unions, which already have been offered significant pay increases after a presidential board recommendation, are pushing back on work rules that require employees to be on call and available to work most days.
The White House has told all sides that “a shutdown is unacceptable and will hurt American workers, families and businesses, and they must take action to avert it,” the official said.
Widespread railway disruptions could choke supplies of food and fuel, spawn transportation chaos and stoke inflation.
U.S. President Joe Biden, cabinet members and senior administration officials “engaged” with the unions and rail companies on Monday to try to avert a shutdown, with more senior-level engagements planned for Tuesday, the official said.
One key issue is ensuring “continued distribution of vital hazardous materials that depend on rail transport, such as chlorine for water treatment plants,” the official said.
Railways last week said they would cease shipments of hazardous materials such as chlorine and chemicals used in fertilizer so they are not stranded in unsafe locations if rail traffic stops.
Railways, including Union Pacific, Berkshire Hathaway’s BNSF, CSX and Norfolk Southern, have until a minute after midnight on Friday to reach tentative deals with holdout unions representing about 60,000 workers. Failing to do so would open the door to union strikes, employer lockouts and congressional intervention.
House of Representatives Majority Leader Steny Hoyer, a Democrat, said Congress could step in and pass legislation if an agreement is not reached to avert a shutdown.
“We want to avoid a crippling railroad strike,” Mr. Hoyer told Bloomberg TV on Monday.
There has not been a nationwide U.S. rail-service stoppage since 1992, when major freight railways closed operations for two days. Railways are struggling to rebuild employee ranks after slashing their work force by almost 30 per cent over the past six years.
The brinkmanship comes at a sensitive time for unions, railways, shippers, consumers and Mr. Biden, who appointed an emergency board in July in a bid to help break the impasse. Mr. Biden has been a long-time supporter of Amtrak and travelled by rail to and from Washington for decades when he was a member of the Senate representing Delaware.
U.S. railways account for almost 30 per cent of cargo transport by weight and maintain about 97 per cent of the tracks Amtrak uses for passenger rail.
Amtrak workers are not affected. But Amtrak operates almost all of its 33,800 route kilometres outside the Northeast Corridor on track owned, maintained and dispatched by freight railways.
Automakers have said a shutdown could quickly hit auto showrooms. Toyota Motor Corp. said in the event of a strike it would have to store vehicles and “many locations would run out of storage within two to four days of production.”
The National Grain and Feed Association, which represents companies that handle more than 70 per cent of U.S. grain, said a rail stoppage would hit right as the fall harvest accelerates in many parts of the country.
“Without rail service to move those crops, many facilities will begin to fill to capacity and may be limited on deliveries they can take from producers,” the association said in a statement. “The economic damages across the food and agricultural supply chain would be swift and severe.”
At midday on Wednesday, Norfolk Southern will stop accepting intermodal cargo: goods moving by combinations of ship, truck and rail transport. Those shipments include consumer products and e-commerce packages that account for almost half of U.S. rail traffic.