www.cnbc.com Open in urlscan Pro
23.11.238.154  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skip Navigation
BREAKING
Hong Kong stocks fall around 4% to lowest levels since 2009; Bank of Japan holds
rates

Renewed threat of rail strike has supply chain managers ramping up contingency
plans
ShareShare Article via FacebookShare Article via TwitterShare Article via
LinkedInShare Article via Email
Markets
 * Pre-Markets
 * U.S. Markets
 * Europe Markets
 * China Markets
 * Asia Markets
 * World Markets
 * Currencies
 * Cryptocurrency
 * Futures & Commodities
 * Bonds
 * Funds & ETFs

Business
 * Economy
 * Finance
 * Health & Science
 * Media
 * Real Estate
 * Energy
 * Climate
 * Transportation
 * Industrials
 * Retail
 * Wealth
 * Life
 * Small Business

Investing
 * Personal Finance
 * Fintech
 * Financial Advisors
 * Options Action
 * ETF Street
 * Buffett Archive
 * Earnings
 * Trader Talk

Tech
 * Cybersecurity
 * Enterprise
 * Internet
 * Media
 * Mobile
 * Social Media
 * CNBC Disruptor 50
 * Tech Guide

Politics
 * White House
 * Policy
 * Defense
 * Congress
 * Equity and Opportunity
 * Europe Politics
 * China Politics
 * Asia Politics
 * World Politics

CNBC TV
 * Live Audio
 * Latest Video
 * Top Video
 * CEO Interviews
 * Europe TV
 * Asia TV
 * CNBC Podcasts
 * Digital Originals

Watchlist
Investing Club
 * Trade Alerts
 * Jim’s Morning Thoughts
 * Analysis
 * Morning Meeting
 * Trust Portfolio

PRO
 * Pro News
 * Pro Live
 * Subscribe
 * Sign In



Menu

 * Make It

 * USA
 * INTL

Search quotes, news & videos
Watchlist
SIGN IN
Create free account
Renewed threat of rail strike has supply chain managers ramping up contingency
plans
ShareShare Article via FacebookShare Article via TwitterShare Article via
LinkedInShare Article via Email
Markets
Business
Investing
Tech
Politics
CNBC TV
Watchlist
Investing Club
PRO


Menu


State of Freight




State of Freight


RENEWED THREAT OF RAIL STRIKE HAS SUPPLY CHAIN MANAGERS RAMPING UP CONTINGENCY
PLANS

Published Thu, Oct 20 20223:44 PM EDTUpdated Thu, Oct 20 20224:06 PM EDT
Lori Ann LaRocco@loriannlarocco
WATCH LIVE
ShareShare Article via FacebookShare Article via TwitterShare Article via
LinkedInShare Article via Email
Key Points
 * Brotherhood of Maintenance of Way Employees Division of the International
   Brotherhood of Teamsters (BMWED), the third-largest rail union, rejected a
   labor deal with railroads that the Biden Administration had helped to
   negotiate.
 * Unions are able to strike starting on Nov. 19 unless Congress intervenes or a
   deal is reached.
 * A union rep told CNBC, “The railroads consistently underestimate the
   frustration and anger of the workers. Workers can’t take it anymore.”

In this article

 * CSX+28.86
 * UNP+196.04

Follow your favorite stocksCREATE FREE ACCOUNT
An aerial view of shipping containers and freight railway trains ahead of a
possible strike if there is no deal with the rail worker unions, at the BNSF Los
Angeles Intermodal Facility rail yard in Los Angeles, California, September 15,
2022.
Bing Guan | Reuters

Logistics managers are dusting off their plans for a possible railroad strike in
November that could wreak havoc on the supply chain and cost the U.S. economy up
to $2 billion a day.

The National Carriers’ Conference Committee (NCCC), representing the nation’s
freight railroads in the national collective bargaining, notified the
Brotherhood of Maintenance of Way Employees Division of the International
Brotherhood of Teamsters (BMWED) on Wednesday that the union’s latest proposal
will not be accepted. A deal between the rails and several large unions to avert
a strike, with recommendations from the Biden administration, was moving closer
to completion before being voted down by the BMWED last week.



“Now is not the time to introduce new demands that rekindle the prospect of a
railroad strike,” the NCCC said in a statement.

Tom Nightingale, CEO of AFS Logistics, tells CNBC that logistics managers are
fielding calls from customers in anticipation of a possible strike.

“Prudent shippers already had a plan in place a month ago, and most who did not
have now ramped up their contingency planning after the wakeup call last month,”
Nightingale said. “Proactivity is the key to supply chain success.”

For many intermodal shipments — shipments that use multiple modes of transport
such as ocean, trucking and freight rail — there can be a week between when
cargo is picked up and when it makes it onto the rail lines, according to
Nightingale.

“That lag time will exacerbate the effects of delays and service interruptions,
so effectively managing the risk of intermodal disruption means you must plan
early and often,” he said.



In anticipation of a strike in September, Norfolk Southern, Berkshire Hathaway
subsidiary BNSF, CSX, and Union Pacific all began ramping down freight
approximately five days ahead of the strike date in an effort to move critical
hazmat materials, such as chlorine and ethanol. That freight took priority over
common freight.

“Shippers had a lot of sensitivity to the potential rail strike,” Nightingale
said. “No shipper wants to lose their job or risk losing a customer when they
have had this much advance notice to a looming disruption.”

As a result, AFS saw a significant uptick in customers looking to shift loads
away from intermodal to other modes like truckload and even less-than-truckload
shipping (LTL).

“Shippers don’t want cargo with a limited shelf life sitting at a rail yard,
particularly commodities like chemicals and refrigerated food and beverage,” he
said.

watch now
VIDEO4:0704:07
Union Pacific CEO Lance Fritz discusses recent earnings and supply chain outlook
Squawk on the Street


Under the Railway Labor Act, Congress has the ability to impose the resolution
from Biden’s Presidential Emergency Board, or order the trains to operate as
usual with an extension of negotiations. Nov. 19 is the earliest that rail
unions can strike.

“While it is premature to make predictions about what could happen in
negotiations, railroads will take every necessary and prudent step to ensure the
safety and security of the network and the communities we serve,” a spokesperson
for the Association of American Railroads said in an email to CNBC. “The rail
network does not turn on and off like a light switch and advanced planning and
positioning of assets takes time. Should uncertainty remain ahead of the status
quo expiring with BMWED, past action is a good indicator of how those
operational plans are executed, and specific decisions on timing will be made as
events necessitate.”

“If you are in logistics and you are not already scenario planning for a
potential work stoppage you may be behind the curve right now,” said Brian
Bourke, chief growth officer of SEKO Logistics. “Everyone is waiting for after
the election for any additional movement or news, but the time to start planning
is now.”


ANGER AMONG UNION WORKERS

On October 18, the BMWED posted on its website a letter members could use to
send to their congressional representatives covering the quality of life and
benefits issues, which have been a major sticking point in negotiations over a
new contract. One of the key points of contention is the BMWED looking for more
paid time off, especially for sickness. 

“The push for paid sick time off could potentially lead to Congressional
action,” the letter said. “While we hope the carriers will acknowledge the
concerns of their employees and negotiate with us, it is important that we are
prepared for their unwillingness to address quality of life concerns.”

“The railroads consistently underestimate the frustration and anger of the
workers. Workers can’t take it anymore,” Richard Edelman, counsel for BMWED and
chief spokesperson in the collective bargaining, told CNBC. “The Presidential
Emergency Board (PEB) ruling is just a recommendation. It is not a lid. Carriers
have made the determination of not doing more than the net equivalent of the
PEB.”

Union Pacific CEO Lance Fritz told CNBC during an interview on “Squawk on the
Street” Thursday morning, “We’ve got some negotiating to do with that union and
we’ve agreed to status quo, we’re in status quo while we’re doing that. I am
confident we will find a way to craft an agreement that can be taken back out
for ratification. That doesn’t mean a strike is not possible, it just means in
my opinion I don’t think it’s probable. We’ve got plenty of runway to figure it
out.”

On Sept. 15, before the previous national strike deadline, an agreement was
announced by Labor Secretary Marty Walsh between the two largest unions, the
Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Sheet Metal
Workers’ Transportation Division (SMART-TD) and the National Carriers’
Conference Committee. The BMWED is the third-largest union with 23,900 members.

“The railroads have made billions off of their workers,” Edelman said. “These
are incredibly skilled jobs where sophisticated pieces of equipment are used.
The workers do not feel valued.”

One of the worries among logistics experts is workers quitting, but the AAR
spokesperson told CNBC that train and engine service headcount was up 7.4% in
September compared with January. Fritz told CNBC that UP’s attrition rate is
near its historical norm this year and it’s hiring plan has been right on
target, with no indication of any “Great Resignation” at the rail carrier.

“Those new hires came on board for the same reason most railroaders stay for
life – railroading is a career that allows you to both support a family and take
deep pride in your work,” the AAR spokesperson said.

“Workers need to be able to take off when they are sick. Under the present
policy workers are penalized. Railroad executives are so deep into their own
bubbles they think all of this is okay,” Edelman said.

The AAR told CNBC it updated the leave policy explainer last week.


Related

 1. A second railroad union overwhelmingly rejects deal needed to avert
    nationwide strike
    
 2. New York extends its lead over California as home to nation’s new No. 1 port
    
 3. Wave of LNG tankers is overwhelming Europe in energy crisis and hitting
    natural gas prices
    
 4. China, ‘factory of the world,’ losing more of its manufacturing dominance,
    latest data shows
    
 5. Renewed threat of rail strike has supply chain managers ramping up
    contingency plans
    


MORE IN STATE OF FREIGHT

New York extends its lead over California as home to nation’s new No. 1 port
Lori Ann LaRocco4 hours ago
A second railroad union votes down labor deal needed to avoid nationwide strike
Lori Ann LaRocco
Wave of LNG tankers is overwhelming Europe in energy crisis and hitting natural
gas prices
Lori Ann LaRocco
Read More


 * Subscribe to CNBC PRO
 * Licensing & Reprints
 * CNBC Councils
 * Supply Chain Values
 * CNBC on Peacock
 * Join the CNBC Panel
 * Digital Products
 * News Releases
 * Closed Captioning
 * Corrections
 * About CNBC
 * Internships
 * Site Map
 * Manage Cookie Preferences
 * Careers
 * Help
 * Contact

 * 
 * 
 * 
 * 
 * 
 * 
 * 

NEWS TIPS

Got a confidential news tip? We want to hear from you.

Get In Touch

ADVERTISE WITH US

Please Contact Us

CNBC NEWSLETTERS

Sign up for free newsletters and get more CNBC delivered to your inbox

Sign Up Now

Get this delivered to your inbox, and more info about our products and
services. 

Privacy Policy|Do Not Sell My Personal Information|CA Notice|Terms of Service

© 2022 CNBC LLC. All Rights Reserved. A Division of NBCUniversal

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global
Business and Financial News, Stock Quotes, and Market Data and Analysis.

Market Data Terms of Use and Disclaimers

Data also provided by






COOKIE SETTINGS

We and our partners collect information from your device, such as device
identifiers, IP address, and your browser type to personalize and deliver
content, marketing and advertising—across devices and platforms; for analytics
and measurement, so we can improve our services and develop new ones; to match
and combine offline data with your online activity; and for social features. We
share this information with selected partners with your consent. By clicking
“Allow All”, you consent to our use of these Cookies. Click on the Cookie
categories or the “Detailed purpose descriptions” below to learn more about
these Cookies. We will also use other Cookies that are essential for our site
and Services, including for security and fraud prevention. To learn more about
some of our partners, see the List of IAB Vendors below. Visit our Cookie Notice
and Privacy Policy to learn more.
Allow All


MANAGE CONSENT PREFERENCES

STRICTLY NECESSARY COOKIES

Always Active

These Cookies are required for Service functionality, including security and
fraud prevention, and to enable any purchasing capabilities. You can set your
browser to block these Cookies, but some parts of the site may not function
properly.

Non-IAB Cookies‎

ENSURE SECURITY, PREVENT FRAUD, AND DEBUG

Always Active

Your data can be used to monitor for and prevent fraudulent activity, and ensure
systems and processes work properly and securely.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab

TECHNICALLY DELIVER ADS OR CONTENT

Always Active

Your device can receive and send information that allows you to see and interact
with ads and content.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab

STORE AND/OR ACCESS INFORMATION ON A DEVICE

Store and/or access information on a device

Cookies, device identifiers, or other information can be stored or accessed on
your device for the purposes presented to you.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Non-IAB Cookies‎

PERSONALISED ADS, AND AD MEASUREMENT

Personalised ads, and ad measurement

 * SELECT PERSONALISED ADS
   
   Switch Label
   
   Personalised ads can be shown to you based on a profile about you.

 * MEASURE AD PERFORMANCE
   
   Switch Label
   
   The performance and effectiveness of ads that you see or interact with can be
   measured.

 * CREATE A PERSONALISED ADS PROFILE
   
   Switch Label
   
   A profile can be built about you and your interests to show you personalised
   ads that are relevant to you.

 * SELECT BASIC ADS
   
   Switch Label
   
   Ads can be shown to you based on the content you’re viewing, the app you’re
   using, your approximate location, or your device type.

 * TARGETED ADVERTISING COOKIES
   
   Switch Label
   
   These Cookies are used to collect data about your browsing habits, use of the
   Services, your preferences, and your interaction with advertisements across
   platforms and devices for the purpose of delivering targeted advertising
   content, both on our Services and on third party sites. Third-party sites and
   services also use Targeting Cookies to deliver content, including
   advertisements relevant to your interests on the Services. If you reject
   these Cookies, you will see less relevant advertising.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Non-IAB Cookies‎

PERSONALISED CONTENT, CONTENT MEASUREMENT, AUDIENCE INSIGHTS, AND PRODUCT
DEVELOPMENT

Personalised content, content measurement, audience insights, and product
development

 * DEVELOP AND IMPROVE PRODUCTS
   
   Switch Label
   
   Your data can be used to improve existing systems and software, and to
   develop new products

 * SELECT PERSONALISED CONTENT
   
   Switch Label
   
   Personalised content can be shown to you based on a profile about you.

 * APPLY MARKET RESEARCH TO GENERATE AUDIENCE INSIGHTS
   
   Switch Label
   
   Market research can be used to learn more about the audiences who visit
   sites/apps and view ads.

 * CREATE A PERSONALISED CONTENT PROFILE
   
   Switch Label
   
   A profile can be built about you and your interests to show you personalised
   content that is relevant to you.

 * MEASURE CONTENT PERFORMANCE
   
   Switch Label
   
   The performance and effectiveness of content that you see or interact with
   can be measured.

 * CONTENT SELECTION COOKIES
   
   Switch Label
   
   This group is so Content Selection IAB group can have an id

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Non-IAB Cookies‎

SOCIAL MEDIA COOKIES

Social Media Cookies

These Cookies are set by social media platforms on the Services to enable you to
share content with your friends and networks. Social media platforms have the
ability to track your online activity outside of the Services. This may impact
the content and messages you see on other websites you visit.

Non-IAB Cookies‎


BACK BUTTON PERFORMANCE COOKIES



Vendor Search Search Icon
Filter Icon

Clear
checkbox label label
Apply Cancel
Consent Leg.Interest
checkbox label label
checkbox label label
checkbox label label


 * 33ACROSS
   
   HOST DESCRIPTION
   
   VIEW COOKIES
   
   
    * Name
      cookie name

Confirm My Choices


We and our partners collect information from your device, such as device
identifiers, IP address, and your browser type to personalize and deliver
content, marketing and advertising—across devices and platforms; for analytics
and measurement, so we can improve our services and develop new ones; to match
and combine offline data with your online activity; and for social features. We
share this information with selected partners with your consent. By clicking “I
accept”, you consent to our use of these Cookies. Click Manage Choices to learn
more about these. We will also use other Cookies that are essential for our site
and Services, including for security and fraud prevention. To learn more about
some of our partners select Show Vendors. You can adjust your preferences at any
time via the “Manage Cookie Preferences” link in the footer of relevant
NBCUniversal websites or in-app settings. Visit our Cookie Notice and Privacy
Policy to learn more.


WE AND OUR PARTNERS PROCESS DATA FOR THE FOLLOWING PURPOSES:

Store and/or access information on a device. Personalised ads, and ad
measurement. Personalised content, content measurement, audience insights, and
product development. List of IAB Vendors

I Accept Manage Choices