Railway Strike Congressional Action

Dec 2, 2022 | Breaking News

Railway Workers Unions across the country have been threatening to strike starting December 9th, until Congress’s extremely rare intervention this week, invoking the 1926 Railway Labor Act. Here’s what happened—and what might have happened.

Talks of a nationwide strike have been ongoing for a while, as workers asked for improved scheduling models, pay raises, and paid sick days. Negotiations have been taking place for months and had reportedly come close to a deal multiple times, but each proposed agreement failed. Back in September, the White House said that a tentative deal had been reached as they attempted to broker an end to the strike discussions, but that deal was voted down by a majority of the union workers, reportedly because it did not include paid sick leave.

If the twelve railway unions did follow through on their plans to strike on December 9th, it would paralyze 30% of the US’s freight networks immediately—right in the final two weeks of the holiday shopping season, after a tumultuous year for a global economy that’s counting on reasonably strong Q4 sales to put the wind back into its sails. Freight shipments would have been delayed or canceled by a staff walkout, and buyers and sellers would have had to scramble to find alternative shipping methods if they didn’t plan ahead. Each time a deal failed to be accepted by all parties, that eventuality loomed closer, and the markets reacted. Many who ordinarily relied on railway freight were taking what precautions they could to ensure their business could run uninterrupted, but there are always those who do not have the resources to plan that far ahead.

What did Congress do?

During labor disputes, it’s extremely rare for the federal government to get involved. Typically, when a labor union threatens to strike, they deal directly with management until an agreement is reached. The federal government doesn’t usually have the authority to intervene in these types of labor disputes, but there are a handful of exceptions. One such exception is with Railway Workers Unions, thanks to the 1926 Railway Labor Act.

Wednesday, November 30th, the House of Representatives put together a bill intended to prevent the strike in question, relying on the authority the Railway Labor Act provided them. The bill mandates that the labor unions accept the previously rejected deal—which does not include the paid sick leave that was a major sticking point for the workers. Instead, a second bill was voted on (and passed in the House of Representatives) concerning the proposed sick leave. The legislation makes the proposed strike illegal. While both measures were successfully passed in the House, the bill concerning the sick leave was not expected to pass the Senate. Indeed, that is what happened; the Senate passed the bill mandating the strike be avoided, but voted down the sick leave measure.

The Railway Labor Act established the National Mediation Board, a federal body that acts as a moderating force during labor disputes—they have the power to set limits on management locking out workers, and labor unions walking out on management, as well as mandating cooling off periods when negotiations begin to heat up. But, when that fails, the nearly century-old law also empowers Congress to vote on and impose a contract on the Railway Labor Unions.

The intent of the law was to prevent national strikes from crippling the economy, as Railway Unions had long been established at that point in history, and had spread across the country. It is an extremely rare example of Congressional authority over labor disputes, something that typically only applies to federal institutions (such as the Post Office or the TSA).

The passed bill will, once President Biden signs it, mandate that the four remaining unions accept the deal that’s on the table, and makes a strike illegal, preventing the walkout that could have short circuited freight transportation starting December 9th. The bipartisan bill was passed in the House by a 290-137 margin on Wednesday, and in an 85-15 vote in the Senate on Thursday.

What happens now?

While there wasn’t a strike this time—and the Railway Labor Act makes strikes in the future unlikely without Congressional support—there are always conditions on the ground that affect freight transportation. Anxiety about a potential strike drove some organizations to take steps to prevent their businesses from being affected, and the ripples spread to a variety of industries. Some turned to trucking ahead of the December 9th deadline to maintain their supply and keep their commitments.

Bigger businesses that have the resources at their disposal will usually find a way to avoid slowdowns or shutdowns due to events like a labor dispute in the shipping and logistics sector. They’ll work around the problem to get what they need to where they need it, even if they lose some margin by doing so. But small and medium-sized businesses don’t always have the resources to do that so quickly, and can often get caught up in supply chain issues from a completely different industry. The best approach for those types of businesses is to work with a partner who can handle these problems for you. OL maintains a tremendous network of freight partnerships across the globe, and when there’s a shutdown or slowdown from one method—like a Railway Labor Strike—we’ll find a different pathway for your freight to get to where it needs to be.

Sign up for The Saturday Shipper

It’s a weekly newsletter that breaks down all of what’s happening in the shipping industry. We promise to only send it out once on Saturdays!

Take me there!

Beyond Cost Cutting: Maximizing Value with 3PL Excellence

In today's dynamic landscape of modern supply chain management, the choreography of seamless operations has elevated Third-Party Logistics (3PL) to a pivotal role. It stands as a guiding light for businesses navigating the complexities of supply chain intricacies,...

The Last-Mile Dilemma-3PL Strategies for Timely Holiday Deliveries

Solving the Last-Mile Puzzle: 3PL Strategies for Timely Holiday Deliveries  In the intricate dance of holiday logistics, the spotlight invariably falls on the often-overlooked hero: last-mile delivery. As the festive season unfolds, the significance of this final...

Navigating the Regulatory Seas: A 3PL’s Guide to Compliance in Logistics 

Charting the Regulatory Maze in Logistics  Embarking on the journey through the logistics industry is akin to navigating a dense and intricate regulatory maze. The landscape is a tapestry woven with diverse regulations, each thread contributing to the complex fabric...

Beyond Storage: Unleashing the Power of 3PL Warehousing Solutions

In the intricate dance of modern commerce, businesses find themselves navigating an ever-evolving labyrinth of supply chain intricacies. As the demands on these supply chains become more complex, one silent hero emerges to shoulder a significant burden – warehousing....

Cold Chain Logistics

In the diverse landscape of industries, one unifying factor reigns supreme: the unwavering commitment to product quality. Whether we're talking about life-saving pharmaceuticals, gourmet food, or cutting-edge biotech, the common thread that binds them is the...

Maximizing Efficiency: The Key Benefits of Partnering with a 3PL Provider 

In the fast-paced world of e-commerce and supply chain management, businesses today grapple with increasingly complex challenges. The imperative to meet customer demands, streamline operations, and maintain competitiveness is more crucial than ever. This is where...

ESG Goals in the Shipping Industry: Where Do We Go From Here?

In the dynamic and ever-evolving landscape of modern commerce, the concept of ESG, which encapsulates Environmental, Social, and Governance principles, has emerged as a potent force shaping the future of the shipping industry. It's not merely a buzzword or a fleeting...

High Value Cargo

High-value cargo: it's not just freight; it's the lifeblood of your business. From delicate electronics to precious metals, these treasures command not only substantial monetary value but also a substantial level of responsibility. The stakes are high, and the margin...

Preserving Freshness and Ensuring Compliance

In the bustling world of the food and beverage industry, two imperatives reign supreme: freshness and compliance. These pillars, essential to the industry's very core, dictate not only its success but also the well-being of consumers. As we embark on this exploration,...

Unlocking the Power of Inventory Optimization

In the complex world of supply chain management, few factors hold as much sway over a business's success as the effective management of inventory. Picture it as the beating heart of your operations—a finely tuned balance between supply and demand that can mean the...