Congress Votes To Avert Rail Strike After More Than 400 Organizations, Including MSCI, Weigh In

The United States avoided what would have been a crippling freight rail strike after U.S. House and Senate lawmakers approved legislation to address the crisis and President Joe Biden signed the bill into law.

The move came after more than 400 organizations, including the Metals Service Center Institute, sent a letter to lawmakers asking them to intervene. A rail stoppage would have frozen almost 30 percent of U.S. cargo shipments and affected U.S. energy, agriculture, manufacturing, healthcare, and retail sectors.

The letter said, “A potential rail strike only adds to the headwinds facing the U.S. economy. A rail stoppage would immediately lead to supply shortages and higher prices.” The legislation implements the labor agreement that freight rail carriers and unionized workers had agreed to with the help of the Biden administration back in September.

While that deal provided rail workers with pay increases totaling 24 percent over five years, capped health care premium payment for workers, and made it easier for workers to take leave for medical appointments, several labor unions had voted not to ratify it, setting up the possibility of a strike.

Analysts had estimated that any rail service stoppage would have caused supply shortages and work stoppages during the holidays that would have cost the U.S. economy $2 billion a day. Sick leave had been a major sticking point for labor unions and the workers they represent.

The legislation signed into law last week does not include a provision to offer sick leave to rail workers, however. House lawmakers had approved a separate piece of legislation that would have given rail workers seven days of paid sick leave per year, but senators rejected that measure. President Biden said he supports increasing paid leave accommodations for rail workers, but that discussion should be addressed by unions and freight rail companies separately from the bill.

The vote tallies were overwhelmingly bipartisan in both the House and Senate. Senators voted 80-15 to approve the bill while House lawmakers agreed to the bill by a 290-137 margin.