U.S. freight railroads says board wage findings will guide labor contract deal

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LOS ANGELES — U.S. freight railroads said Wednesday they are prepared to reach labor agreements with unionized workers based on recommendations from President Joe Biden’s emergency board, even though they represent “the largest wage increases in decades.

The National Carriers Conference Committee (NCCC), which represents railroads including Union Pacific, BNSF and Berkshire Hathaway-owned CSX, has been in contract talks with unions representing 115,000 workers for more than two years. Biden last month appointed an Emergency Presidential Board (PEB) to break the deadlock and the board released its findings to interested parties on Tuesday.

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“The railways are ready to meet with railway unions and reach agreements based on the PEB report without delay,” the NCCC said.

Railroads are vital for transporting necessities ranging from fuel oil to soybeans. A lockout or strike could disrupt supply chains, fuel inflation and put pressure on the already fragile US economy.

Susquehanna Railroad analyst Bascome Majors, in a memo titled “State of the Unions – Neither side will like the PEB report,” said the board had split the difference between the unions’ wage demand and railway supply.

The NCCC said the recommendations would increase wages by 24% over the five-year period to 2024, with a 14.1% wage increase taking effect immediately.

The recommendations — often part of a deal — also include five annual $1,000 lump sum payments, healthcare premium adjustments and limited work rule changes. A portion of the wage increases and lump sum payments would be retroactive, resulting in an average of more than $11,000 in immediate payments to employees.

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Factoring in health care, retirement and other benefits, total employee compensation would average over $150,000 per year.

Union representatives did not respond to requests for comment.

Both parties are in a cooling-off period that ends at 12:01 a.m. EDT on September 16. If they do not reach a voluntary settlement at that time, a strike or lockout becomes legally possible. Missing that deadline also opens the door for Congress to intervene.

Mike Steenhoek, executive director of the Soy Transportation Coalition, said agricultural shippers were frustrated with the unreliability of rail service and urged the two sides to reach a deal before the deadline to avoid further service disruptions.

“This would be a particularly inopportune time given the upcoming harvest and global food insecurity,” Steenhoek said.

(Reporting by Lisa Baertlein in Los Angeles and David Shepardson in Washington, DC; Editing by Bernadette Baum and Richard Pullin)

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