Washington Retail Insight

Railroads Avoid Strike That Threatened Retailers’ Holiday Season

By J. Craig Shearman
Washington Retail Insight
December 2, 2011

The nation’s freight railroads and their unions have reached agreements that will avoid a strike that could have disrupted retailers’ supply chains during the busy holiday shopping season.

The National Railway Labor Conference, a Washington group that represents the railroads, announced Thursday night that it had reached tentative agreements with the Brotherhood of Locomotive Engineers and the American Train Dispatchers Association. Ten of the railroads’ 13 unions had already settled contract talks, and another representing maintenance workers agreed to keep talking until February.

Without the agreement, the engineers and dispatchers could have gone on strike this coming Tuesday, when a 30-day cooling off period was scheduled to end.

At the urging of NRF and other business groups, the House had been tentatively scheduled to vote today on a measure to prevent the strike by imposing recommendations made by a Presidential Emergency Board on both sides.

 “For retailers, a strike during the busy holiday shopping season could be devastating,” NRF President and CEO Matthew Shay said in a letter to members of the House and Senate. “It is imperative that Congress recognize the severe economic harm threatened by the failure to reach agreement with the remaining rail unions and move quickly to prevent a rail strike that would prove devastating to both businesses and consumers.”

Shay said in the letter that retailers rely heavily on freight rail to move merchandise across the country, especially during the holiday season, and that even a one-day strike at such a crucial time would create a sustained backlog that could clog the transportation system for weeks. Other modes of transportation would be unable to take over the extra volume, and the effects could potentially linger into the spring selling season, he said.

“I applaud all the stakeholders who worked to avert a stoppage that would have hurt our nation’s economy just as the holiday season gets underway,” Senate Majority Leader Harry Reid, D-Nev., said after the contract settlements were announced. “It is Congress’ constitutional duty to ensure the unfettered flow of interstate commerce and to protect the nation’s economic well-being.”

House Speaker John Boehner, R-Ohio, said a rail shutdown would have been “unacceptable to the American people, particularly at a time when our economy is already struggling to create jobs.”

© 2011 National Retail Federation