Amtrak cancels long-distance trains as railroad strike TBEN approaches

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(Bloomberg) – Amtrak has canceled all long-distance trains starting Thursday, while White House-led talks between freight rail companies and unions continued in a race to avoid a shutdown of the rail system on Friday.

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The company has already begun phased adjustments as a work stoppage could harm passenger rail services on the routes it operates on tracks owned and maintained by freight railroads, Amtrak said in a statement Wednesday. The Northeast Corridor route between Washington, New York and Boston is not part of the planned closure, as Amtrak has its own lines.

The fallout is mounting, even before the shutdown, as labor talks drag on and freight carriers pull out against the threat of a strike by some 125,000 freight rail workers next Friday. A strike could cost the world’s largest economy more than $2 billion a day.

The congestion would be the largest of its kind since 1992, and it would mix up a wide range of goods carried by rail – from food to metal and auto parts – in addition to the travel chaos for thousands of commuters. The White House is considering an emergency decree to allow important goods to flow through.

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All passenger service cancellations are a disruption to Americans and underscore why the dispute must be resolved as soon as possible, a White House official said in response to Amtrak’s announcement. The unions and railways continue to negotiate in good faith to avoid a closure of freight railways, the official added.

Labor Secretary Marty Walsh is leading the negotiations, which continued without a break over lunch, a Labor Department spokesman said. Transport Minister Pete Buttigieg is also actively involved in the parties, his department said on his Twitter account.

A Biden-appointed board of directors made a series of recommendations last month to resolve the dispute, including pay increases and better health care coverage. But the proposal did not include terms about scheduling, attendance and other matters important to the two trade unions seeking a deal, affiliates of the Teamsters Union and of the International Association of Sheet Metal, Air, Rail and Transportation Workers. Together they represent about 60,000 employees.

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They have complained that employees can be fired under the punitive presence policies of railway companies and have been fired for falling ill or going to the doctor. The companies have said they are offering paid time off that employees can use for medical appointments.

A railroad strike would be “potentially disastrous,” with “serious consequences that will spread throughout the economy if a strike actually takes place,” Joshua Bolten, Chief Executive Officer of Business Roundtable, told reporters.

Supply chain problems are said to be “geometrically magnified by the railroad strike, and that’s not just the occasional Amazon box showing up two days later than it should – these are crucial materials” like chlorine to keep the water clean that would be delayed, Bolten said.

If all 7,000 long-haul freight trains available in the US were to stop running, the country would need an additional 460,000 long-haul trucks each day to make up for lost capacity, which is not possible due to equipment availability and a shortage of drivers, American Trucking Association president Chris Spear said in a letter to Congress.

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The trucking industry — which itself deals with labor issues — faces a shortage of 80,000 drivers across the country, he wrote.

A majority of the 12 unions involved have reached or finalized tentative agreements with employers, according to the National Carriers’ Conference Committee, which represents railroad companies including BNSF Railway, CSX Corp., Kansas City Southern, Norfolk Southern Corp. and Union Pacific Corp. in collective bargaining.

However, members of those unions would also refuse to work unless a deal is struck with the entire group.

Earlier, nearly 5,000 workers, represented by the International Association of Machinists, rejected the contract, complicating efforts to prevent a nationwide strike.

The union members gave the leadership the green light to go on strike if necessary. IAM District 19 also said it would agree to an extension until September 29 to continue negotiations.

(Updates with comments from the White House in the fifth paragraph.)

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