Threat of rail strike looms over U.S. coal industry

Well, that was close — again. The train zooming out of the tunnel doesn’t look like a nationwide strike hitting the industry, at least for now. In fact, the train may be laden with coal actually making a timely delivery – for now.

The threat of a nationwide strike by the crews who maintain, load and pilot the nation’s freight trains has been looming since the summer, when the Class I railroads and the dozen unions representing the thousands of people who load and operate the trains reached an impasse over a new labor contract. While the railroads agreed to – under pressure from the Biden administration – substantial increases in wages and some benefits for the railroad workers, the unions say that draconian work-schedule policies and lack of days off are far from resolved.

The railroads, meanwhile, have been struggling to hire crews and meet timely delivery schedules, especially in the coal and agriculture sectors. Rail service got so bad that the Surface Transportation Board held a series of “emergency” hearings this past spring.

For now, the two sides may be snarling at each other behind the scenes but there won’t be a chance of a walkout until Dec. 9. As a matter of speculation, there is talk that the end of the “cooling off period” – already extended from a Nov. 19 deadline – might actually be moved into next year.

Coal industry participants remain pessimistic that there will be at least a token attempt at a national walkout, but it will likely be short-lived.

One coal industry veteran said that “your guess is as good as mine on a railroad strike. I still put the odds of a strike at less than even, maybe 25%, as I think that the parties will eventually arrive at a negotiated deal.”

But – and there’s always a “but”: “I would not be surprised to see the ubiquitous one day-stoppage and then the court injunction ordering workers back – just as a show of force. I am not sure how the government sees this. While it may not be the ‘bad publicity’ that might have been if occurring prior to elections, it also would not look good ‘just before Christmas’ either. But then again, it is two years until the next election.”

Another coal industry veteran said: “I think it’s gonna happen [but] I don’t think DC can afford it to be very long. Too many other things going on for the incumbents.”

As for a strike’s effect on coal prices, he said, “I can’t imagine that it would last long enough to really affect coal prices. I think the direction that natural gas moves will have more of an effect.”

As for the latest development, it’s becoming a game of whack-a-mole. No sooner does one union tentatively agree to new labor terms than another union says, “No way.”

You have a bunch of unions that must each agree in principle – and then individually ratify – any new labor agreement, but it’s all for one, one for all. In that vein, the National Carriers’ Conference Committee, which is negotiating a new contract on behalf of railroads’ management, had more bad news on Nov. 14.

“We are disappointed that the International Brotherhood of Boilermakers, which represents approximately 300 rail employees out of the more than 100,000 involved in this bargaining round, has failed to ratify its recent tentative agreement with the nation’s freight railroads,” the NCCC stated. “This result will delay the benefits of the tentative agreement for IBB-represented employees, including an immediate 14.1% wage increase and substantial retroactive and lump sum payouts.”
But the “cooling off period” will remain in place until Dec. 9.

“The NCCC will remain engaged with IBB throughout the remaining cooling off period and will continue to seek an agreement based on the framework recommended by Presidential Emergency Board 250,” the Biden administration-appointed board, the NCCC said.

Just after midnight Nov. 20, the two largest rail unions representing conductors and engineers – the Brotherhood of Locomotive Engineers and Trainmen, and the Transportation Division of the Sheet Metal, Air and Rail union (SMART-TD) – will conclude their ratification processes and announce their vote.

“Combined, these two unions represent approximately half of all unionized rail employees,” NCCC said.

The Brotherhood of Maintenance of Way Employees Division (part of the International Brotherhood of Teamsters) and Signalmen are currently negotiating with the NCCC. The BMWED rejected the contract in October.

A strike by any one rail union would lead to a shutdown of America’s major freight railroads, as all the other unions, even those that have ratified contracts, would honor the picket lines.

So many unions to negotiate with, so little time! Especially with the holiday season within shouting distance and all that entails – reduced schedules, days off and a normal slowdown of coal deliveries.

Tags: Coal, Mining