Biden Signs Law To Prevent Rail Strike, Which Trade Groups Said Could Have Devastated the Retail Industry

President Biden prevented what could have been a disastrous rail strike ahead of the holiday season.

The senate on Thursday passed a bill to make the rail strike illegal, which the President signed into law on Friday. The action came as the threat of a strike loomed after only eight out of 12 rail unions ratified an employment contract. The rest, petitioning for paid sick leave days, refused to sign and threatened to strike.

If management and all of the unions failed to meet at an agreement, a strike could have commenced as early as Dec. 9, with the unions that have already ratified agreements joining in at the picket line.

As a strike loomed, retail trade groups warned about the disastrous impact a U.S. rail worker strike could have on the economy and the industry and urged the government to act quickly.

A strike would threaten supply chain recovery across the country and leave retailers without a crucial avenue for shipping and transporting their goods moving into the holiday season. In the absence of rail access, retailers would need to utilize shipping alternatives such as planes and trucks.

“It would be devastating for our economy at a time like this to see any stoppage in the shipment of goods by rail,” said president and CEO of the National Retail Federation Matthew Shay in a Tuesday call with media discussing sales results for Thanksgiving weekend. “We rely on [rail shipping]. It would cost our economy billions of dollars a day. It’s the worst possible time for this to happen.”

A strike could have cost the U.S. economy $2 billion a day, the Association of American Railroads (AAR) estimated. AAR and other trade groups have previously recommended that Congress impose recommendations for resolution via the Presidential Emergency Board (PEB), which was created to help settle the dispute. 

President Biden called on Congress to pass legislation to approve a tentative agreement between workers and railroad management, a move that was met with praise from industry trade groups. In a statement, the president said the shutdowns could result in 765,000 Americans) including rail workers) out of a job in the first two weeks of the strike.

The Footwear Distributors & Retailers of America (FDRA) has also urged Congress to help avoid a rail strike and is currently encouraging its members to email Congress to urge them to take action to prevent a strike.

“Shutting down freight rail right before the holiday season would be devastating for American families and businesses,” said FDRA’s VP of government affairs Thomas Crockett in a statement. “It would create uncertainty, drive up costs, and worsen inflation. Congress must be prepared to take action to ensure a railroad strike does not happen.”

The American Apparel and Footwear Association also urged the government to help resolve to the disputes to avoid a strike as well.

“Rail is an essential part of the eco-system that helps you get dressed every day. Approximately 30% of clothes, shoes, and accessories move by rail, ” said Steve Lamar, AAFA president and CEO, in a letter to the U.S. House of Representatives.

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