The Supply Chain Matters blog alerts our readers to today’s breaking early morning news that a looming U.S. wide suspension of rail services appears to have been averted.

After a marathon 20-hour bargaining session that lasted into the overnight, The White House announced early this morning that a tentative agreement among railroads and three labor unions had been reached.

The agreement reportedly includes a 24 percent wage increase to be spread over five years from 2020 to 2024, including 14.1 raise effective upon contract ratification. Also included are five annual $1000 payments.  There are no specific indicators as to whether consideration for sick days, the most significant obstacle, was part of this agreement. The three labor unions involved in this tentative agreement represent upwards of 60,000 rail workers.

President Joseph Biden as well as U.S. Labor Secretary Marty Walsh were involved in moving the process along, stressing that the U.S. economy and industry supply chains could ill afford a rail disruption at this critical time. President Biden reportedly directly called into the negotiating session last evening, stressing the importance of continuation of rail services as well as avoiding harm to families, farmers and businesses.

Multiple reports note that ratification is not a given because the impacted labor unions will have to now ratify the deal.  The complicating factor remains that a renewed labor agreement involves multiple labor union contracts. The looming Friday deadline to reach a resolution has now been extended to a cooling-off period expected to last several weeks to give the parties time to ratify this agreement.

A number of U.S. wide business and trade associations are now welcoming this news as well. Preparations and talks were already underway with representatives of other transportation modes for contingency planning and the prioritization of transport movement certain perishable and deemed critical goods. The U.S. Congress was also prepared to step-in with passing legislation, if no agreement was reached.

Industry supply chains for now can also take comfort that a major and harmful disruption seems to be averted.