Railroads and unions representing tens of thousands of workers have struck a tentative agreement to avert a freight shutdown that posed a threat to the already strained U.S. food supply, which is grappling with historically high inflation and supply chain disruptions. The deal, announced on Thursday morning, impacts around 60,000 railroad employees and will soon be presented to union members for a vote, during which there will be no strikes.
According to the National Carriers’ Conference Committee, which negotiates on behalf of the railroads, the agreement includes a 24% wage increase over the five-year period from 2020 to 2024, along with five annual lump sum payments of $1,000. “These rail workers will receive better pay, improved working conditions, and peace of mind regarding their healthcare costs—truly hard-earned benefits,” President Joe Biden stated. “This agreement is also a win for railway companies, enabling them to retain and attract more workers in an industry that will remain a cornerstone of the American economy for years to come.”
Concerns had been raised by food industry groups about the potential impact of a strike on supply and prices, especially in the current inflationary climate. Max Fisher, Chief Economist at the National Grain and Feed Association (NGFA), noted that grain storage facilities would have reached capacity, risking crop spoilage. This scenario could have driven up prices for staples like bread and baked goods, which are already affected by the war in Ukraine and poor wheat growing seasons. The NGFA praised the agreement and affirmed its commitment to collaborating with lawmakers, regulators, and the rail industry to ensure the resilience and reliability of the nation’s freight operations. With 1,000 companies handling U.S. grains and oilseeds, the NGFA emphasized the critical role of an efficient rail network, which transports 25% of all U.S. grain.
The Consumer Brands Association expressed relief over narrowly avoiding a strike but described the situation as “too close for comfort,” leading to some cancellations of product shipments and rail routes. “This scenario underscores the need for better preparedness against potential supply chain disruptions. Implementing policies that enhance resilience and improve visibility across the national supply chain is essential for consumer packaged goods companies seeking to strengthen their supply chains, particularly after the pandemic revealed significant vulnerabilities,” stated Tom Madrecki, CBA’s vice president of supply chains and logistics.
In light of these developments, it is imperative for industries to consider all aspects of their supply chains, including the sourcing of essential materials like calcium citrate 500, to ensure stability and continuity in operations.