WASHINGTON, Sept 15 (Reuters) – Major U.S. railroads and unions secured a tentative deal on Thursday after 20 hours of intense talks brokered by President Joe Biden’s administration to avert a rail shutdown that could have hit food and fuel supplies across the country and beyond .

If they accept the deal, which was announced around The deal includes an immediate wage increase of 14.1%, the railways said.

Biden, who planned to greet federal negotiators before speaking about the deal, said in a written statement that the deal was “a victory for the tens of thousands of railroad workers who worked tirelessly through the pandemic to ensure America’s families and communities got deliveries of , what has kept us going in these difficult years.”

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Unions whose members bitterly rejected earlier proposals will now vote on the deal. Even if those votes fail, a rail strike that could have happened as early as one minute past midnight Friday has been averted for weeks because of standard language included in such an agreement, a person familiar with the negotiations said.

Biden’s Labor Secretary Marty Walsh hosted contract negotiations in Washington that lasted 20 straight hours between unions representing 115,000 workers and railroads including Union Pacific ( UNP.N ), BNSF, CSX ( CSX.O ), Norfolk Southern ( NSC. N) and Kansas City South.

Officials are expected to host a news briefing later Thursday.

Failure to reach an agreement by the deadline would have cleared the way for workers to legally strike.

A rail shutdown could have frozen nearly 30% of U.S. freight shipments by weight, fueled inflation, costed the U.S. economy as much as $2 billion a day, and set off a cascade of transportation problems affecting the U.S. energy, agriculture, manufacturing -, healthcare and retail sector. .

Railroad stocks pared initial premarket gains after mixed economic data, with Union Pacific rising 1.9% in after-hours trading and CSX falling 2.3%. Read more

U.S. natural gas futures fell about 8% after rising 10% in the previous session. Investors expected that a rail strike would have threatened coal supplies to power plants and increased demand for gas.

Amtrak, which runs passenger trains, said it will resume normal service on Friday after canceling long-distance trains in anticipation of a strike. Read more

The impact of a shutdown would have extended beyond US borders because trains connect the US to Canada and Mexico and provide vital connections for massive ships that carry goods from around the globe.

Negotiations between the companies and a dozen unions had dragged on for more than two years, leading Biden to appoint an emergency board in July to help break the impasse. Biden personally called Walsh and negotiators Wednesday night to urge them toward a deal, telling them “again to recognize the damage” a shutdown would have on families, farmers and businesses, according to a person with knowledge of the negotiations.

National Retail Federation CEO Matthew Shay thanked the Biden administration for taking action, adding in a statement that his group is “relieved and cautiously optimistic.” Emily Skor, CEO of biofuels trading group Growth Energy, also praised the deal, noting that much of the nation’s ethanol moves by rail.

Freight railroads had halted the transportation of dangerous goods, including chlorine for water purification and ammonia for fertilizer, as well as shipments of refrigerated food and other goods that use rail and at least one other mode of transportation. Their aim was to prevent cargo from being stranded in unsafe places.


The rail industry has cut nearly 30% of its workforce over the past six years, slashing wages and other costs as it boosted profits, buybacks and dividends to investors. Profits at billionaire Warren Buffett’s Berkshire Hathaway, ( BRKa.N ), which owns BNSF, rose 9.2% in the latest quarter to $1.7 billion.

The number of U.S. railroad workers has fallen from over 600,000 in 1970 to about 150,000 in 2022, according to the Bureau of Labor Statistics, due to technology and cost savings. The result is that many industrial workers are on call at all times, waiting to respond at short notice to work for days at a time.

The latest deal follows some earlier recommendations from the president’s emergency negotiators. It includes a 24% percent salary increase over a five-year period from 2020 to 2024, as well as payments of $1,000 in each of five years.

Biden, who has called himself the most union-friendly president in history and attacked companies for raking in “excessive” profits, praised a deal he said would give workers “better wages, improved working conditions and peace of mind about their health care costs.”

The president is not out of the woods yet when it comes to supply chain labor issues. About 22,000 union workers at 29 West Coast ports that handle nearly 40% of US imports are also in high-stakes contract negotiations.

Administration officials wanted the disputes resolved ahead of November’s midterm elections, which will determine whether Biden’s fellow Democrats retain control of Congress.

Senior congressional leaders had threatened to pass legislation forcing a resolution on railroads and unions if negotiations failed. House Speaker Nancy Pelosi praised the tentative deal, saying Congress was “ready to act” but that “fortunately, this action may not be necessary.”

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Reporting by Trevor Hunnicutt in Washington; Additional reporting by Lisa Baertlein in Los Angeles, David Shepardson and Susan Heavey in Washington, Stephanie Kelly in New York, Jahnavi Nidumolu, Aishwarya Nair, Bansari Mayur Kamdar and Kannaki Deka in Bengaluru; Editing by Heather Timmons and Catherine Evans

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