A tentative deal has been reached between trade unions and rail freight companies in the United States to avoid a potential strike later this week which could have cost the economy up to $2 billion a day.
The agreement was reached early on Thursday morning after 20 hours of talks convened by the Biden administration.
US president Joe Biden is reported to have personally called railway company executives and union leaders on Wednesday night to encourage them to reach an agreement.
Mr Biden on Thursday morning described the deal as “an important win for our economy and the American people”.
American railways are predominantly used for transporting freight. Up to 30 per cent of goods are carried on cargo trains.
There were fears a strike could have fuelled inflation and led to shortages of goods which would have created significant political problems for Mr Biden’s governing Democratic Party in the run-up to key midterm elections in November.
Passenger services would also have been affected as many railway lines are owned and maintained by freight companies. The US passenger rail operator Amtrak had already started to cancel some long distance-services ahead of a potential strike later this week.
Unions had argued the dispute was not about money but working conditions and work schedules for train drivers and conductors.
Unions maintain these schedules excessively arduous after years of falling staff numbers.
Drivers and conductors contend that due to staff reductions of about 30 per cent in the industry over the last six years, they face being on call for 14 consecutive days without a break and do not receive any sick leave, either paid or unpaid.
Unions maintain that some companies operate attendance policies based on a points system that can penalise workers up to dismissal for missing work to go to routine medical appointments or for family emergencies.
Details of the proposed settlement have not yet been released. The Washington Post reported on Thursday that the deal included new leave policies which it described as a significant concession by train carriers to workers.
Mr Biden said on Thursday morning that the proposed deal represented “a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years.
“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned. The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come. ”
Mr Biden had in July established an emergency board to create a framework to settle the dispute between unions and rail employers over terms and conditions.
The emergency board recommended increases of 24 per cent over a five-year period including an immediate raise of 14 per cent with some backpay to 2020. The proposal also involved $1,000 cash bonuses.
Several unions have accepted the terms but for others the sticking point was not about pay but working conditions.
Rail workers will have to ballot on the new proposals but there will be no industrial action in the meantime.
