Railroads and rail worker unions reached a tentative labor agreement early this morning, preventing the potential for a strike or lockout this week that would have ultimately caused significant economic damage to already unsteady U.S. supply chains.
While the membership of the unions will still need to ratify it, this agreement also means the railroads that were limiting and suspending service throughout the week will likely resume regular activity in the coming days and U.S. goods—like soy—will keep moving.
Why it matters: Reliable railroad freight service is essential for U.S. soybean growers and other producers to compete in the global market. With harvest on the horizon, continuing regular freight rail service is critical to ensure that the 20% of soybeans and 40% of biodiesel that moves on the U.S. freight rail network can make it to market. ASA and other ag groups, including the Agricultural Transportation Working Group, have actively pushed for resolution as negotiations continued this week.
What’s the agreement? The labor agreement will provide rail employees with a 24% wage increase during a five-year period from 2020 (when the collective bargaining began) through 2024, including an immediate payout of $11,000. This outcome largely reflects the recommendation from the Presidential Emergency Board. According to a statement from President Biden this morning, Labor Secretary Walsh, Transportation Secretary Buttigieg, and Agriculture Secretary Vilsack were all integral to securing this final outcome.
Looking ahead: ASA thanks the administration, rail carriers, and unions for reaching an agreement that provides reliability for the soybean industry as we approach the 2022 harvest season. ASA will continue to monitor this situation as the unions consider ratification. While ratification will likely not be determined in full until mid-November, parties have agreed to operate with regular service until union members vote to ratify the agreement.
***Courtesy of the Illinois Soybean Association***
