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'There's no contingency plan' if rail labor legislation fails: Port of LA Executive Director

The clock is ticking as railroad unions, management, and Washington lawmakers race to reach a deal before a Dec. 9 deadline that would mean a nationwide strike.

On Wednesday, the House of Representatives passed a bill to temporarily avert a strike, along with a separate measure to guarantee seven days of paid sick leave to railroad employees. Both measures now head to the Senate, where Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell have vowed to reach an agreement "sooner" than the Dec. 9 deadline.

Sen. Bernie Sanders (I-VT), an ardent supporter of labor unions, promised to delay the vote to avert a strike itself unless the separate measure also gets an up or down vote. On Wednesday, Sanders and 11 Democratic senators released a statement praising the dual House votes and urging passage of both in their chamber, saying: "Congress can and must make this agreement better."

A rail strike of such a magnitude could cost the U.S. economy more than $2 billion a day, though according to Port of Los Angeles Executive Director Gene Seroka, that’s “probably a soft estimate.”

“There’s no contingency plan that can make up for that,” Seroka said on Yahoo Finance Live (video above). Seroka also stressed: “The focus is on trying to get this deal done. The impact of rail across the nation is so great. 28% of all the cargo moving goes on those trains.”

A GE AC4400CW diesel-electric locomotive in Union Pacific livery, is seen in Los Angeles ahead of a possible strike if there is no deal with the rail worker unions. (REUTERS/Bing Guan)
A GE AC4400CW diesel-electric locomotive in Union Pacific livery, is seen in Los Angeles ahead of a possible strike if there is no deal with the rail worker unions. (REUTERS/Bing Guan)

Roughly one-third of U.S. exports move by rail, according to the American Association of Railroads. In California, two-thirds of all cargo that leaves the state from two main ports in Los Angeles and Long Beach goes by rail, meaning that a rail strike would be an “unbelievably significant” disruption, Seroka said.

According to the Port of Los Angeles, the average train consists of 30 double-stack cars, the equivalent of approximately 400 truck trips.

'It's going to be a fight'

The primary bill passed by the House would force a settlement between management and workers that had been rejected back in September by four of the 12 labor unions. The agreement features a 24% compounded wage increase from 2020 through 2024 along with five annual $1,000 lump-sum payments.

While the temporary reprieve is welcome news for most of the country, Seroka emphasized he understands the intentions behind rail workers wanting to strike as labor unions push for paid sick leave, higher staffing levels, more flexible scheduling, and overall better quality of life.

“We cannot dismiss the importance of these items to labor, who’ve been working so hard throughout the pandemic,” he said.

House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer address the media after a meeting about avoiding a railroad worker strike on November 29, 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer address the media after a meeting about avoiding a railroad worker strike on November 29, 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

Although the deadline to reach a deal is Dec. 9, Seroka isn’t optimistic that a deal will actually be complete before the end of the year.

“Collective bargaining is hard, and in our case, this is a coast-wide agreement stretching from the state of Washington down to San Diego with 29 ports that also have their own unique local contracts,” he said. “Getting those in line along with the broader policies and framework takes a lot of time and effort … It’s going to be a fight. It really is.”

Ben Werschkul contributed to this post.

Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at adriana@yahoofinance.com.

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