OMAHA (DTN) -- Two Congressmen filed joint resolutions Thursday that would keep union railroad workers from going on strike if they don't reach an agreement with the nation's Class-1 railroads before Dec. 6.

A work stoppage would have huge implications for grain movement, which is why the National Grain and Feed Association sent a letter to Congress urging them to exert their constitutional authority under the Commerce Clause to ensure uninterrupted operation of essential freight rail services.

"It certainly is a big issue. It's important for all agricultural products, but especially for soybeans," said Mike Steenhoek, executive director of the Soybean Transportation Coalition. "There's a real spike for soybean exports during this time of the year, then it levels off when South American harvest comes online."

The joint resolutions introduced Thursday by Senator Harry Reid, D-Nev., and Rep. John Mica, R-Fla., would extend a cooling-off period mandated by the Presidential Emergency Board appointed by President Barack Obama. This would force the unions to accept the board's recommendations or enter binding arbitration.

President Obama created the emergency resolution board to mediate the dispute on Oct. 6, which stalled a potential strike. That commission offered recommendations and imposed a one-month cooling-off period. During that period, 10 of the 13 unions came to agreements with the railroads. The unions that have not agreed think the wage increase percentages are too low and want the railroads to shoulder a heavier portion of health care costs.

One union, Brotherhood of Maintenance of Way Employees, has agreed to extend the cooling-off period to Feb. 8. It's been moving in step with the two unions that have not made agreements with the railroads, the American Train Dispatchers Association and the Brotherhood of Locomotive Engineers and Trainmen, and has said it will strike if the other two unions do.

The cooling-off period officially ends at 12:01 a.m. on Dec. 6. That's why NGFA urged Congress to introduce the resolutions to prevent the unions from striking.

"A national freight rail strike would undermine significantly our industry's ability to meet domestic and export market demand -- U.S. agricultural exports are one of the sole positive contributors to the U.S. balance of trade -- and would result in significant adverse financial impacts on a wide array of businesses dependent upon agricultural production," the letter stated.

Across the U.S. economy, railroads generate $2 billion dollars of economic activity each day, according to shippers. Freight railroads currently account for approximately 35% of the transport of agricultural products, according to NGFA's letter to Congress.

Railcar loads spike during the harvest season, averaging above 20,000 cars of soybeans each week. During the week ending Nov. 19, 22,750 railcars were loaded with beans. That means about 66 million bushels of soybeans worth $744.4 million based on Thursday's closing price are shipped via rail each week.

COMPANIES MAY SWITCH TO TRUCKS

Even the threat of a strike could cause companies to switch shipments from rail to trucks, according to an article in Land Line magazine, a trade publication for the trucking industry. Shippers likely started switching to trucks Thursday to avoid the possibility of letting freight sit on rails during a strike. The magazine quoted a trucking industry analyst that expects spot truck prices to run at a premium rate until there is a solution.

Steenhoek said some ag shippers are likely scrambling to secure trucks to deliver gain in case of strike, but the trucking industry can only absorb a small portion of the volume because "the volume the rail industry moves is too great and the distances are too long to simply shift it onto the backs of the trucking industry." And like NGFA's letter to Congress noted, weather-related restrictions will soon be imposed on barge traffic in inland waterways, further limiting alternative shipping options.

Steenhoek said if a strike were to occur, many shippers would declare force majeure because they couldn't fulfill customer orders, similar to what happened during a port strike on the West Coast several years ago.

"We hope cooler heads prevail at the bare minimum," Steenhoek said. "We hope that the cooling-off period gets extended, and ultimately we would like something resolved. This time of the year has a real pernicious effect on our economy, particularly the agricultural economy."

Katie Micik can be reached at katie.micik@telventdtn.com

(AG/ES)

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