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A railway workers' strike has been averted for the time being after railway companies and trade unions reached a tentative deal after more than two years of negotiations.
Reuters reported that President Biden had announced the agreement earlier today, just as companies were bracing up for the start of industrial action that could have taken place as early as tomorrow.
A railway workers' strike would have paralyzed as much as 30 percent of U.S. cargo shipments, delivering a $2-billion blow to the U.S. economy.
"It is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America's families and communities got deliveries of what have kept us going during these difficult years," the U.S. president said.
The deal follows more than 12 hours of intensive negotiations between railways, including Union Pacific, BNSF, and Norfolk Southern, and three trade unions representing some 60,000 railway workers.
The dispute began two years ago after trade unions demanded better wages and working conditions after three years of no pay rises for the workers while the companies they worked for booked substantial profits, Reuters recalls.
A dozen trade unions participated in the negotiations, and two had already ratified deals with the railway companies. Others later also agreed to the proposed terms, with three unions holding out until now.
Per an earlier report citing unnamed sources, trains transporting crude oil and ethanol for Northeastern states were stopped in anticipation of industrial action, threatening to cause an energy shortage in one of the biggest energy-consuming regions in the United States.
It is already short on middle distillates, including heating oil, with the situation particularly serious in New England. Distillate stocks there are at the lowest level since the record began in 1990, according to the Energy Information Administration.
A railway shutdown would have sent ripples across the U.S. economy, aggravating an already challenging inflation and supply situation.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.