Tentative deal averts U.S. railroad shutdown

STORY: Major U.S. railroads and unions reached a tentative deal Thursday (September 15) on better pay and improved conditions for workers.

There are hopes it will be enough to avert a rail shutdown across the country that could have hit food and fuel supplies.

The White House hosted labor contract talks into the night on Wednesday aiming to secure an agreement. U.S. President Joe Biden described it as a win for tens of thousands of rail workers.

His administration had been making contingency plans, over fears the labor strife could snarl deliveries of critical goods.

White House Press Secretary Karine Jean-Pierre:

"A shutdown is not acceptable. That is not something that we want. It risks harming families, it risks farming, harming businesses and whole communities. And we have made that clear empathetically and repeatedly to both parties."

A railroad shutdown would freeze almost 30% of U.S. cargo shipments, stoke inflation, impede supplies of food and fuel, cost the U.S. economy about $2 billion per day and cause transportation woes.

Failing to reach a deal before the deadline of one minute after midnight on Friday would have cleared the way for legal worker strikes.

Unions must now vote on the deal, according to a source familiar with the talks, but even if the vote fails, strikes have been averted for weeks.

Negotiations between railroads including Union Pacific, Berkshire Hathaway, CSX, Norfolk Southern and Kansas City Southern and a dozen unions had stretched for more than two years, leading Biden to appoint an emergency board to help break the impasse.

Railroads originate almost a quarter of U.S. grain shipments, and the energy sector relies on rail to move coal, crude oil, ethanol and other products.