US railroad workers are preparing to strike over poor working conditions after a breakdown in negotiations after three years of talks.
The government has announced contingency plans intended to ensure the timely delivery of critical goods in the event of a shutdown of the rail system.
On Friday the “cooling off” period imposed by the government is due to end.
With almost 40% of the US’s long-distance raw materials and finished products being carried by rail, a shutdown would be, according to the head of the US Chamber of Commerce, an "economic disaster."
President Biden and members of his cabinet were in contact with unions and railroads as part of their efforts to avert a strike, according to White House Press Secretary Karine Jean-Pierre.
"We have made crystal clear to the interested parties the harm that American families, businesses and farmers and communities would experience if they were not to reach a resolution," Karine Jean-Pierre said, reports AP.
"The administration has also been working with relevant agencies to assess what supply chains and commodities are most likely to face severe disruptions," she said.
Workers point to the 40,000 jobs lost in the industry between November 2018 and December 2020 and the record profits for BNSF (owned by owned by Berkshire Hathaway Inc (NYSE:BRK.B)) and Union Pacific (NYSE:UNP), the two largest American railroad corporations.
Labour Secretary Marty Walsh has met with the parties this week.
"A shutdown of our freight rail system would be an unacceptable outcome for our economy and our people," said a Labour department spokesperson.
Prior to Friday's strike deadline, railroads have already begun to restrict shipments of hazardous materials and have announced plans to cease hauling refrigerated products.
Businesses that depend on Norfolk Southern (NYSE:NSC), UNP, BNSF, CSX, Kansas City Southern, and other railroads for the delivery of raw materials and finished products have begun preparing for the worst.
A ninth agreement was announced Tuesday based on the recommendations of a Presidential Emergency Board Joe Biden appointed this summer, which recommended a 24% pay raise and US$5,000 in bonuses in a five-year deal retroactive to 2020.
The agreement provides for an additional day of paid leave per year and increases the cost of health insurance.