Freight Railroads Propose Limiting Sensitive Cargo as Strike Threat Looms


Freight railroads said they are planning to halt the transport of hazardous materials and sensitive cargoes, such as chemicals used in fertilizer and chlorine for water purification, as they continue negotiations with two labor unions.

Railroads have informed customers that they may stop accepting certain types of freight, including bulk shipments, beginning Monday to avoid materials being unattended or unsecured in case of a work stoppage. Rail customers such as agricultural companies are evaluating contingency plans, including shutting down processing plants amid rail delays, or hiring alternative transportation providers such as trucking companies.

The ripple effects of the railroads’ plans are extending beyond freight traffic. Amtrak said it would begin reducing some passenger services Tuesday by canceling trips over three long-distance routes.

Tens of thousands of American workers are on strike and thousands more are attempting to unionize. WSJ examines the roots of this new labor activity and speaks with a labor economist for more context on U.S. labor’s changing landscape. Photo: Alyssa Keown/AP

The freight railroads have already reached new labor deals or are completing tentative agreements with 10 unions, and are in continuing talks with two groups representing about 66,000 workers. The two remaining unions, the Brotherhood of Locomotive Engineers and Trainmen, and SMART-Transportation Division, said Sunday that the railroads’ plans to restrict cargo is a move to “extort a contract settlement” and that they remain at the bargaining table.

The talks involving railroad labor groups and companies including

Norfolk Southern Corp.

NSC 0.29%


Union Pacific Corp.

UNP 0.98%

have been going on for months.

Norfolk Southern said it would begin limiting some shipments used by large retailers that are currently bringing in goods for the holiday shopping season.


Gene J. Puskar/Associated Press

A White House-appointed panel has already interceded with recommendations for a deal ahead of a Friday deadline for an agreement.

If those negotiations remain at a stalemate, workers for two unions representing rail engineers and other employees could decide to stop work. Both groups voted to authorize a strike if a deal isn’t reached.



in July appointed a federal panel to help resolve the railroad labor dispute, a move that opened a 60-day window for mediation. That period ends this week.

Labor Secretary

Marty Walsh

on Sunday night pushed the unions and their employers to reach an agreement to avoid a rail shutdown, said a representative from the Labor Department. The National Economic Council has also held meetings about railroad labor negotiations, and Mr. Biden has been briefed about the progress of negotiations, according to White House officials.

On Monday, the president made calls to union representatives and rail companies in a bid to avert a strike, one of the White House officials said.

“The fact that we are already seeing some impacts of contingency planning by railways again demonstrates that a shutdown of our freight rail system is an unacceptable outcome for our economy and the American people, and all parties must work to avoid that,” the Labor Department representative said.

Labor negotiations are also being closely watched by rail customers and business groups amid broader concerns that a prolonged dispute could upend supply chains.

The U.S. Chamber of Commerce, in a letter to congressional leaders Monday, said the restriction on hazardous materials “threatens to send equity and commodity markets spiraling.” It warned that a full rail shutdown could cost the U.S. economy $2 billion a day.

Amtrak, the national passenger railroad, relies on freight railroads for almost all of its intercity routes outside of the Northeast Corridor, which links Boston and Washington, D.C., and wants to avoid the risk of passenger trains getting trapped in the disruptions, a spokesman said. Amtrak said cancellations on other long distance and state-supported routes could follow.

Freight railroads, which have already been halting shipments in different locations at various times to ease congestion, said they have to do more in response to a possible work stoppage.

CSX Corp.

and Union Pacific have imposed an embargo on a list of hazardous materials, including chlorine, compressed and liquefied gases and chemicals used in the manufacturing and pharmaceutical industries.

Shutting off rail access for hazardous materials would force companies like chemical manufacturers to find alternate routes across the country via pipelines, barges and trucks.

In many cases they will simply have to delay orders, said

Scott Jensen,

a spokesman for the American Chemistry Council, a Washington-based industry group for chemical manufacturers. “As of today, our members are being impacted by the potential for a rail strike because of these embargoes,” Mr. Jensen said.

Labor Secretary Marty Walsh has pushed unions and their employers to reach a deal to avoid a rail shutdown.



Trade groups say their members are already suffering after years of poor rail service that deteriorated further during the Covid-19 pandemic as companies struggled under a surge in orders, equipment shortages and worker absences. Rail hubs are among the most congested areas of the nation’s freight networks, with many shippers facing weekslong delays to move cargo.

One of the railroads, Norfolk Southern, said it would also begin limiting some intermodal transports, on Tuesday. Such shipments, in which railroads carry shipping containers and truck trailers, are often used by large retailers that are currently bringing in goods for the peak holiday shopping seasons.

“With all the challenges we are facing right now, to have a self-inflicted wound does not help anybody,” said

Jonathan Gold,

vice president for supply chain at the National Retail Federation.

Congress could prevent a strike under federal law. Under the Railway Labor Act, railroads and unions are bound to collective bargaining agreements including mediation with multiple cooling-off periods to provide time to resolve disputes and stave off strikes.

The last national rail strike in the U.S. was in 1991 and ended after a day when Congress swiftly passed and President

George H.W. Bush

signed legislation ordering the workers back to their jobs and setting up an arbitration process to resolve a dispute over staffing. A walkout in 1992 against CSX, which affected interconnected rail networks across the country, also ended with Congressional action after two days.

The White House-established panel last month made a nonbinding recommendation that unionized workers get a wage increase of 24% between 2020 and 2025. Under the terms, workers would get a 14% wage increase immediately and five annual $1,000 payments, two of which would be made retroactively.

The National Carriers’ Conference Committee, which represents freight railroads in national collective bargaining, said the wage agreements reached so far largely follow the presidential board’s guidelines.

and Patrick Thomas contributed to this article.

Write to Esther Fung at and Paul Berger at

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link