US railroads prep for shipping hazardous, security-sensitive materials ahead of pending strike

HOUSTON (ICIS)–The six Class 1 freight railroads in the US are preparing for handling hazardous and security-sensitive materials in accordance with federal regulations ahead of a possible rail worker strike that could take effect on Friday.

The 30-day window for negotiating a labour agreement between US freight railroads and rail workers closes on 16 September.

The National Carriers Conference Committee (NCCC), a part of the National Railway Labor Conference (NRLC), is representing the nation’s freight railroads in the negotiations.

The NCCC has reached tentative agreements with 10 of the 12 rail worker unions, but The Brotherhood of Locomotive Engineers and Trainmen (BLET) and the International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division (SMART-TD), are holding out for better quality of life issues.

The BLET and SMART-TD together represent about 90,000 rail workers and they are accusing the railroads of declaring embargos on certain materials as a negotiating tactic ahead of the deadline.

“This completely unnecessary attack on rail shippers by these highly profitable Class I railroads is no more than corporate extortion,” the unions said in a joint statement.

“The railroads are using shippers, consumers and the supply chain of our nation as pawns in an effort to get our Unions to cave into their contract demands knowing that our members would never accept them,” the unions said.

The Association of American Railroads (AAR) said the actions are necessary to ensure that no such cargo is left on an unattended or unsecured train in the event of a work stoppage.

“Additionally, other freight customers may also start to experience delayed or suspended service over the course of next week, as the railroads prepare for the possibility that current labour negotiations do not result in a resolution and are required to safely and securely reduce operations,” the AAR said.

The threat of a stoppage is being felt across markets.

Chemtrade Logistics Income Fund warned investors of possible material negative impacts on the company’s business results.

“Chemtrade, its suppliers and customers rely on rail service for the movement of raw materials and finished goods,” the company said. “In preparation for the strike, many of the US railroads have already started pre-emptively curtailing the shipment of certain goods, which will impact Chemtrade’s ability to ship chlorine, sulphur dioxide and hydrogen sulfide to customers starting this week.”

A hydrochloric acid (HCl) producer in the Midwest told ICIS on Monday that it is already seeing rail service slowing.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest.

In Canada, producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

Additional reporting by Bill Bowen

Thumbnail image of railroad tracks by Shutterstock