Rail and port labor issues adding to supply chain misery, expert says

The struggle by the freight railroads and their unions to reach consensus on a labor agreement comes at a time when it is already anyone’s guess how existing challenges in the supply chain will play out over the next several months, according to Ashley Craig, an attorney with Washington law firm Venable.

For starters, there are rail service issues, as well as lingering supply chain impacts from the COVID-19 pandemic, according to Craig, who co-chairs Venable’s international trade group. Furthermore, the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association are negotiating a new labor contract for West Coast port dockworkers. The last contract expired July 1.

To that already potent mix, add contract talks in rail. The Presidential Executive Board (PEB), a three-member committee appointed by President Joe Biden, has been taking testimony from the railroads and the unions about key issues in their negotiations. PEB Chair Ira Jaffe and members Barbara C. Deinhardt and David Twomey will issue a report by Aug. 16 offering recommendations for the railroads and the unions. Then there will be a 30-day cooling-off period for both sides to consider those ideas. The unions will not be permitted to strike or engage in a work stoppage before the cooling-off period ends. 

Wages and benefits are among the sticking points between the unions and the railroads. Contract negotiations began in January 2020. The National Mediation Board took over negotiations earlier this year but released the parties after they failed to reach an agreement. Per the Railway Labor Act, the formation of the PEB was the next stage in the process.

FreightWaves spoke with Craig on how the broader supply chain is coping with all these labor unknowns, plus the consumer and economic landscape post-pandemic.

This interview was edited for length and clarity.