Rail work stoppage averted as engineers, dispatchers agree to contract terms

The railroad industry, rail shippers, and the U.S. economy have dodged a bullet.

The leaders representing the nation's rail engineers and dispatchers unions announced Thursday night that they have agreed to tentative labor contracts with the nation's railroads, averting what could have been a crippling nationwide work stoppage as early as Dec. 6.

The announcement means that all 13 rail unions have either ratified contracts with the railroads, tentatively agreed to contract terms or, in the case of the union representing maintenance-of-way employees, have agreed to extend their contract deadline until Feb. 10. As a result, the rail supply chain will operate uninterrupted through what's left of the peak holiday shipping season.

The unions acted just hours after Rep. John L. Mica (R-Fla.), chairman of the House Transportation and Infrastructure Committee, introduced a measure in the House that would have imposed recommendations made by a special emergency board appointed by President Obama to report on and offer suggestions to resolve the dispute.

Congressional imposition of the emergency board's recommendations would have required the workers to remain on the job and accept terms and conditions that might have been less favorable than what the unions could have negotiated with the railroads.

In recent days, top shipper and retail groups such as the National Industrial Transportation League (NITL), the National Retail Federation (NRF), and the Retail Industry Leaders Association (RILA) had called for congressional action to avert a work stoppage if the engineer and dispatcher unions couldn't reach agreement with the railroads.

By some estimates, a work stoppage would have cost the U.S. economy about $2 billion a day. Shippers also worried that a stoppage would prevent goods that would normally move via intermodal service from reaching store shelves in time for what are expected to be the two busiest shopping weeks of the year, starting Dec. 10.

In a letter to members announcing the leadership's approval and putting the contract to a membership vote, Dennis R. Pierce, national president of the Brotherhood of Locomotive Engineers and Trainmen, said a "voluntary settlement was preferable because [the rank and file] control the outcome through the ratification process, instead of allowing a third party — in this case, a highly unpredictable Congress — to control the outcome."

In a statement, Edward R. Hamberger, president of the Association of American Railroads, said the industry's goal has been to "reach voluntary settlements with all of its rail unions. These agreements bring the industry closer to achieving that goal."