U.S. freight railroads prepare for potential strike disruption

Major U.S. freight railroads said on Friday they were preparing for a possible strike and service disruption a week before a deadline in protracted labor talks.

BNSF, owned by Berkshire Hathaway, and CSX said they were taking necessary steps to secure the shipments of hazardous and security-sensitive materials in the event of a strike.

"While these preparations are necessary, it does not mean that a work stoppage is inevitable," BNSF said in a statement to Reuters.

Contract negotiations between railways including BNSF, Union Pacific, CSX and unions representing 115,000 workers hit an impasse this summer after more than two years of talks. Failure to reach a settlement before a cooling-off period expires on Sept. 16 could open the door to strikes, employer lockouts and congressional intervention.

Talks are "active and ongoing" a spokesperson for the Association of American Railroads said on Friday. Union Pacific and Railroad Workers United did not immediately respond to requests for comment outside business hours.

Last month, President Joe Biden appointed a presidential emergency board that made settlement recommendations to help avoid disruptions to food and fuel supplies and worsening inflation.

BNSF said the remaining unions and other railroads continue to work to reach voluntary agreements based on the board's recommendations to avoid interruption to rail service.

The largest U.S. trucking industry group on Friday urged Congress to be prepared to prevent railroad shutdowns if the negotiations fail to produce contracts by the deadline.

"Congress should take swift action ... to avoid a debilitating and unnecessary labor disruption that could cost the country billions each day," Chris Spear, chief executive of the American Trucking Associations (ATA), wrote in a letter to congressional leadership.

In the early 1990s, Congress required the two sides to engage in final and binding arbitration to prevent disruptions to shipping activities.

Unions and freight railroads have so far reached tentative agreements covering 21,000 workers represented by five of the 12 unions involved in the negotiations.

A railroad work stoppage would cost the U.S. economy $2 billion per day in output and require 467,000 long-haul trucks daily to handle shipments diverted from rail - exceeding supply, the railroad association said.

"Additional insecurity placed on the still fragile U.S. supply chain – as we recover from COVID and other supply chain stressors and move towards the holiday season - will harm the economy at large and individual Americans," ATA's Spear said.