Railway Strike Averted but Disruptions to Supply Chain Remain

Excerpt from the Associated Press: President Joe Biden announced the deal, which emerged from a marathon 20-hour negotiating session at the Labor Department and came just one day before the threatened walkout. "This agreement is validation of what I’ve always believed — unions and management can work together ... for the benefit of everyone," Biden said at the White House. The deal, which includes a 24% pay raise, will go to union members for a vote after a cooling-off period of several weeks. The threat of a shutdown carried political risks for Biden, a Democrat who believes unions built the middle class. But he also knew a rail strike could pose grave economic risks ahead of the midterms, when majorities in both chambers of Congress, key governorships and scores of important state offices will be up for grabs.

Excerpt from the New York Times: With rail unions making clear that their workers were prepared to walk off the job, pressure was building on freight carriers to avoid an economically devastating strike that was set to inflict financial pain on them as well as businesses, farmers and consumers by crippling the movement of many critical goods. The agreement had an immediate impact. A day after canceling all long-distance passenger trains to avoid stranding people in the event of a freight rail strike, Amtrak said it was "working to quickly restore canceled trains and reaching out to impacted customers to accommodate on first available departures." Many of Amtrak’s trains run on tracks operated and maintained by freight carriers. "This agreement is a big win for America," Mr. Biden said. "And this is a great deal for both sides, in my view."

Excerpt from NPR: President Biden called the agreement a win for rail workers who worked through the pandemic "to ensure that America's families and communities got deliveries of what have kept us going during these difficult years." Those deliveries, however, are still not entirely back on track, despite an apparently receding pandemic. And it could be a long time before supply chains again run as smoothly as they did before the age of lockdowns and mask mandates. "Unfortunately, I just don't see anything in the next year or two that's going to lessen the number of disruptions," says Lisa Anderson, a supply chain expert and president of LMA Consulting Group. "Ports have mostly cleared themselves out. Trucking has mostly resolved itself. The cost of international shipping is way down. So there are definitely a lot of things that have gotten better," says Jason Furman, a Harvard professor who headed the Council of Economic Advisers under President Obama. "But in other key areas, there are still several fairly serious wrinkles, such as high fuel and food prices and a shortage of microchips for vehicles that aren't likely to be resolved anytime soon," Furman says.