A Union Pacific rail car is parked at the Canadian Pacific Railway (CP Rail) Toronto Yard in Scarborough, Ontario, Canada March 20, 2022. REUTERS/Chris Helgren/File Photo
Major U.S. railroads and unions reached a tentative deal on better pay and improved conditions for workers, U.S. President Joe Biden said on Thursday, potentially averting a rail shutdown across the country that could have hit food and fuel supplies.
A shutdown could freeze almost 30 percent of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transport woes affecting the U.S. energy, agriculture, manufacturing and retail sectors.
Biden administration officials hosted labor contract talks into the night on Wednesday aiming to secure an agreement with the unions which represent 115,000 workers. Failing to reach a deal before the deadline of one minute after midnight on Friday would have cleared the way for legal worker strikes.
“It is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years,” Biden said.
Negotiations between railroads including Union Pacific, Berkshire Hathaway’s BNSF, CSX, Norfolk Southern and Kansas City Southern and a dozen unions stretched for more than two years, leading Biden to appoint an emergency board to help break the impasse.
Shares of U.S. railroad operators rose between 2.4 percent and 2.9 percent in early trade.