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Corporate Billionaires Are Wrecking The Supply Chain

Above Photo: Railroad workers inspect tracks as they repair a section of Union Pacific train tracks after a train derailed from the tracks, which are littered with thousands of opened boxes and packages stolen from cargo shipping containers in downtown Los Angeles, California, on January 16, 2022. Patrick T. Fallon / AFP via Getty Images.

Just look at the railroads.

Draconian labor policies, “cost-cutting” measures, and mass layoffs are decimating US railroad workers for the sake of corporate profits. And the effects are reverberating throughout the supply chain.

Before these past two years, if you were polling passersby on the street, you would have been hard pressed to find anyone ready to admit that they were seriously concerned about the supply chain. You’d be hard pressed, for that matter, to find many who could describe what the supply chain actually is (present company included). That is certainly not the case today. From shortages—and correspondingly high costs—of groceries and consumer goods like baby formula and sunflower oil to medical devices, “supply chain issues” have become a pronounced source of anxiety and frustration for consumers, workers, businesses, and politicians alike.

“The supply chain is in chaos,” Will Knight wrote for WIRED in late March, “and it’s getting worse.” Unsurprisingly, however, the pain resulting from that chaos—like most things in this world—is not evenly distributed. As the economy contracts, inflation continues to skyrocket, and Wall Street tucks tail and runs, everyday workers are the ones left holding the bag.

The supply chain is a lot like the cardiovascular system of global commerce, a vast pulsing web of innumerable veins, arteries, and capillaries connecting points of extraction, production, and trade to points of sale around the world. Moving through that web at any given time is a dizzying menagerie of trains, trucks, ships, and planes transporting raw materials and finished goods.

Much like with the human body itself, the sheer logistics keeping such a complex system moving seamlessly are mind boggling, and when blockages and breakdowns occur at any point, the rest of the system is affected. Each prong and node of the supply chain infrastructure, and every individual process of transporting cargo units—containers coming and going at the ports, freight loaded onto trucks and trains—must work in tandem with one another to prevent disruptions. If movement at one node slows down, it starts a chain reaction across the entire system, and it becomes increasingly more difficult to right the ship (sometimes literally) when things begin to break down.

And things have been breaking down. The supply chain, Knight continues, “is too complex, interconnected, and fragile to be made completely immune to shocks, especially ones as seismic as a global pandemic or a major war.” Between the war in Ukraine, two-plus years of a deadly pandemic, extreme weather events exacerbated by climate change, a “trade war” between the US and China, and other larger-than-life factors, the supply chain has experienced a series of shocks that have experts sounding the alarm and businesses lamenting the seemingly unavoidable spikes in the cost of goods, which have been passed on to consumers.

While these massive geopolitical and environmental events have intuitively served as a sort of taken-for-granted, catch-all explanation for supply chain disruptions and rising costs, they have also conveniently obscured another, sorely under-acknowledged cause of our collective supply chain woes: corporate greed. The fact that corporations have been raking in record profits while simultaneously jacking up prices on everyone (and shareholders have been bragging about it on quarterly earnings calls) certainly has more consumers catching the stench of something rotten beneath the prevailing narrative about inflation and supply chain issues. But corporate extortion via price gouging is not the only issue here.

To grasp just how deep the rot goes, it’s crucial to remember what is perhaps the most frequently (and willfully) forgotten fact about the supply chain: Even though those colorful logistics maps are dazzling to the eye, they also make the whole system seem more like a mechanical process of moving things, but at the ground floor of this system—every single part of it—are people, flesh-and-blood human beings making everything move. When we say that COVID-19 affected the supply chain, what we’re actually talking about in most cases is the people whose labor keeps the supply chain moving in some way, the people driving the trucks and trains, the people loading and steering ships at the ports, but also the farmers and farmworkers and miners and loggers putting out product to be moved, the packers and processors, and so on. What we’re talkin about is a whole lot of those people getting sick, even dying. But there are other ways that the people working somewhere along the supply chain have been—and are being—crushed, thus hurting the supply chain itself, and what’s happening to freight railroaders in the US today is a perfect example of that.

Again, the system shocks mentioned above—war and a raging pandemic among them—have provided a ready-made culprit for delays and disruptions all along the US supply chain. Missing from the equation, though, are the rail carriers themselves: the billionaires who own them and the overpaid CEOs who run them. Lest we forget, BNSF Railway and Union Pacific made billions in profit in 2021. But the cost of those profits, according to railroad workers and their advocates, has been incalculable. Profit-motivated, “cost-cutting” decisions made by those at the top of the corporate hierarchy have ground the hardworking operators, engineers, and others working along the railroad into dust. Such destructive decisions, as retired railroad engineer, union member, and former Iowa state legislative representative Jeff Kurtz puts it, are the real supply chain crisis. Because companies like BNSF and Union Pacific have pushed railroad workers—and, thus, the railroads—to the breaking point in their quest for greater profits, “trains are sitting still, people are quitting in record numbers… people don’t want to hire out on the railroad [anymore] because they’re not going to give their life away… I don’t blame them.”

In mid-May, for The Real News, I went to Fort Madison, Iowa, to attend a solidarity rally held by former railroaders, labor leaders, and their families.

Fort Madison is a quiet town of around 10,000 people nestled up against the Mississippi River along the Iowa-Illinois border. To reach Fort Madison, you have to ditch the main interstate in Des Moines and drive for another few hours southeast on Highway 34—or take the early morning Amtrak to the station sitting right in the heart of downtown. The town serves as the only Iowa stop along Amtrak’s Southwest Chief route, connecting Los Angeles and Chicago by 1,744 miles of rail line owned and serviced by BNSF. On May 15, this lone commuter outpost served as a critical site for railroaders to gather and express outrage and concern over BNSF’s disastrous “Hi-Viz” attendance policy, which they see as the latest example of the industry’s  self-destructive, runaway corporate greed.

BNSF’s Hi-Viz attendance policy was introduced earlier this year. Railroad workers opposed its implementation so fiercely that the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD), which together represent roughly 17,000 railroad workers, initiated steps to prepare for a strike that would have begun on Feb. 1. BLET National President Dennis R. Pierce and SMART-TD President Jeremy Ferguson called the Hi-Viz policy “the worst and most egregious attendance policy ever adopted by any rail carrier.” However, on Tuesday, Jan. 25, US District Court judge Mark Pittman, at the urging of BNSF, blocked the two unions from striking, saying that a strike would cause the rail company “substantial, immediate and irreparable harm.” Judge Pittman did not have much to say about the “substantial” and “irreparable harm” that the Hi-Viz policy would cause railroad workers and the supply chain, however, and the policy went into effect.

Now, six months later, concerns expressed by union officials, rank-and-file workers, and their families about the disastrous effects the policy would have on them and the industry have proven to be well founded.

Under the policy, each rail worker is given a balance of 30 points. Workers who “mark off” (take unscheduled days off) receive a penalty—anywhere from 2 to 25 points off the balance. If the balance drops to 0 at any time, the worker is then subject to disciplinary action, and the point total is reset to 15. If the balance drops to zero three times, then the worker is fired. Workers have a chance to regain points, but only if they work without accruing an infraction for 14 days straight. In mid-May, BNSF revised the policy to allow for additional bonus points to be earned, but only for top performers within a given period.

Given the nature of the work, with a mobile workplace that moves along a rail system where delays and disruptions are a regular occurrence, rail workers’ prescribed schedules change frequently, and they generally receive scheduling calls just hours before they’re required to report to their terminals and get to work. Under such conditions, the Hi-Viz attendance policy becomes even more villainous, essentially preventing workers from being able to meaningfully plan their lives because they are always on call. And that’s not accounting for any accidents, emergencies, illnesses, or whatever other unexpected circumstances that human beings with lives outside of work have to navigate.

One might think, as BNSF itself has encouraged employees to think, that a points-based attendance policy like Hi-Viz would be designed to help workers and managers account for and manage such unexpected disruptions while maintaining operations. Instead, workers report that the policy acts as a heavy-handed mechanism for punishing them for the crime of being a living, breathing person who can’t always predict the future. How can you plan for an emergency? You can’t. But if that emergency happens on a “high-impact day” (when an unscheduled absence prompts deeper cuts to one’s point tally), you’re screwed.

Confused yet? Feeling a little bit uncomfortable with all the red tape? That’s the point.

The principle behind Hi-Viz is not exclusive to the railroads. Such point-based attendance systems have become common practice in many industries—Kellogg’s workers noted their disdain for a similar system at their company when workers struck last fall, and coal miners at Warrior Met Coal in Alabama, who have been on strike since April 1, 2021, cited a similar policy as one of the reasons they hit the picket line. Such policies are designed to keep workers “on all the time.” Major incidents like family and medical emergencies can become career-ending if a worker falls below zero points. Even minor occurrences, like a scheduled doctor’s appointment or a child’s baseball game, can lead to severe consequences for railroaders. In essence, the Hi-Viz point system has made an already strenuous work-life balance impossible for workers.

Hi-Viz is not an aberration; it is merely the latest egregious manifestation of a cost-and-corner-cutting philosophy that has predominated in the rail industry for years, resulting in trains getting longer and heavier and crews getting slimmer and buried under more work. Looking at the visualized employment data for rail transportation workers on the Bureau of Labor Statistics website, one can see how dramatically rail companies have reduced their workforce since 2015:

Screenshot of “Employment, Hours, and Earnings from the Current Employment Statistics survey (National)” trend graph generated using 2001-2022 data compiled by the Bureau of Labor Statistics (BLS) on the BLS “Databases, Tables & Calculators by Subject” website. Graph shows a precipitous drop in all rail transportation employees from 2015-2022. Screenshot/TRNN.

“Over the last six years,” Karl Evers-Hillstrom noted in May of this year, “the leading freight carriers laid off 45,000 employees, or nearly 30 percent of their combined workforce, according to the Surface Transportation Board. Most of the layoffs came before the pandemic, which ushered in a huge demand for shipped items.” But this trend of “lean” staffing (ie, deliberate understaffing) is showing no signs of letting up. Having already cut deep through muscle and sinew, the rail carriers are now attempting to saw into the bone.

In addition to draconian attendance policies, the railroad carriers are currently seeking via contract negotiations to eliminate two-person crews on their Class I trains, dropping the number from 2 people to 1 person per train. Yes, you read that right. Fight for Two Person Crews, an advocacy group made up of rail workers and labor leaders, has been fighting tooth and nail to maintain the current two-person scheduling by lobbying state legislatures to pass laws prohibiting one person crews on the railways. “Big railroad corporations are pushing to eliminate the second person in the cab of freight trains,” they write on their website. “These trains consist of hazmat and other dangerous materials. Despite the millions of dollars these companies make in profit, they are willing to risk the safety of your community and railroaders to make more.”

For many whose lives are connected to the rail industry, each of these top-down, profit-maximizing moves by the rail carriers is seen as yet another bloodthirsty maneuver to squeeze as much profit for executives and shareholders out of their beleaguered workforce as they can.

“Our engineers and conductors didn’t have more life that they could sell, so the railroads decided to just take it,” said former railroad employee and Iowa state legislative representative Jeff Kurtz at the May 15 rally. “This rally is not about money. This rally is about the fact that they’re trying to steal the lives of the people that are running these trains and making their money for them. They think they can squeeze another dollar out of them, and it’s not right.”

Because of the damage they have done to the workers who make the whole industry run, these policies have already had disastrous consequences across the rail industry, affecting companies’ ability to recruit and retain staff, and leading to dangerous (and avoidable) situations along the rail line. Workers attending the rally in Fort Madison spoke of derailments, stalled trains, and medical emergencies occurring as a direct result of the overburdening of their workforce. In short, for the sake of corporate profits, rail workers are overwhelmed and being overworked across the entire industry, and it’s causing major disruptions throughout the US-based supply chain.

Again, the supply chain is a complex, interconnected system, and disruptions at one point in that system will cause disruptions elsewhere. The corporate mismanagement of the rail industry has directly contributed to bottlenecks cropping up at different points throughout most of the major US shipping and logistics infrastructure. The ports are congested, with ships taking anywhere from 6 to 12 days to load and unload their cargo. If the freight can’t make it out of the port and onto a train, then shippers must wait for space to be made available. Reporting for CNBC, Lori Ann LaRocco writes,

“According to MarineTraffic and Blume Global data, the Port of Oakland tops the list of congestion with vessels taking six days to unload and load. Import containers are lingering almost 11 days in the port before they are transported. The Port of Los Angeles is the second highest in wait times, clocking in almost 12 days for containers to leave the port and five and a half days for vessels to be processed. Rail delays of 6.2 days are also plaguing the port’s productivity.”

recent release by the US Department of Transportation also calls attention to this issue, noting that “This breakdown in rail service is making it more difficult to clear the docks at Ports of Los Angeles and Long Beach: the number of trucking containers that have been on the docks for nine days or more is lower than ever at the Port of Long Beach but the number of long-dwelling rail containers is breaking new records each week.”

And all these disruptions are part of the behind-the-scenes reality creating the high prices and product shortages we’re seeing as consumers. As Bill Tomson reports in AgriPulse, disruptions in the US railroad system have had severe consequences for the movement of crucial agricultural products. “We’ve had a multiyear deterioration of rail service… and with the current pressure in the labor supply, it has gotten far worse. That disruption has made rail service increasingly unreliable to such an extent that it’s causing significant disruption in the supply chain,” John Bode, president and CEO of the Corn Refiners Association, told AgriPulseThe Food and Beverage Issue Alliance, which represents 58 US-based food and beverage trade associations, has said that the continued US rail service failures have “forced at least two temporary shutdowns of corn refineries this year, the effect of which is unheard of.”

Continued disruptions and complaints from shippers have gotten so bad that they’ve prompted members of Congress to take action in recent weeks. In a letter addressed to Surface Transportation Board Chairman Marty Oberman, a bipartisan group of US senators demanded that the board take immediate action to address inadequate freight service across the United States. “We are very concerned over the significant rail service disruptions occurring throughout the US freight rail network. Reports from rail customers, including our manufacturers, farmers, ranchers and energy producers, indicate reliable rail service is not being provided in many situations. Similarly, shippers have little recourse or alternative options to get their goods to market,” the letter said. “In some instances, rail service problems have forced producers to curtail or temporarily stop production altogether. Further accounts of lengthy delays and unpredictable service paint a troubling picture of the conditions our nation’s commerce currently faces.”

Data published by the American Association of Railroads further illustrates multiple months’ worth of slowdowns: “for the week ending May 21, 2022, US Class I railroads hauled a total of 506,976 carloads and intermodal units, down 4.1% compared with the same week last year. This comprises 233,244  carloads—down 3.7% from the prior-year period—and 273,732 containers and trailers—down 4.5% compared with 2021.” Again, while COVID and the war in Ukraine have taken a lot of the blame, rail workers attest that these slowdowns are also very much the consequence of rail carriers’ ill-advised policies.

In recent weeks, the Biden administration has appointed Retired General Stephen R. Lyons to the the Biden-Harris Administration Supply Chain task force. The task force was formed last year to help “address bottlenecks, speed up the movement of goods, and help lower costs for American families,” according to a release from the White House. While the task force has announced improvement in service over the last couple of months within the US supply chain, the disruptions to rail service remain a particular area of concern.

The causes of diminishing rail service were laying the groundwork for today’s crisis well before COVID hit US shores in early 2020. Again, over the last six years, the Class I freight railroads—BNSF Railway, CSX Transportation, Kansas City Southern Railway, Norfolk Southern, and Union Pacific—have slashed their collective workforce by 30%. “They’ve cut labor below the bone, really,” STB Chair Marty Oberman told the House Transportation Committee during a hearing earlier this month. “In order to make up for the shortage of labor, they are overworking and abusing the workforces they have.”

You simply can’t lose that many workers in that short of a time span and expect that no operational crises, like the one the railroads are experiencing right now, will occur. And those tremendous losses to the rail workforce, especially in the freight service, have come both as a result of mass layoffs and a mass exodus by workers fleeing increased workloads, decreasing benefits, and decreasing quality of life. Some of those workers found refuge in passenger rail service, many have left altogether.

BNSF, one of two rail carriers that services the Port of Los Angeles, has lost nearly 1,000 rail workers since the Hi-Viz attendance policy was announced, according to Charlie Wishman, President of the Iowa Federation of Labor, who spoke at the May 15 rally in Fort Madison. “We have to protect the workers who have had their right to strike taken away by a judge’s decision,” he said, referring to the injunction granted by a Texas court earlier this year. “Since that decision, about 1,000 engineers and conductors have resigned, resulting in trains standing still and further hurting the supply chains. These giant companies can quit complaining about a worker shortage when they’re the ones who are causing it.”

Many current rail employees have been reticent to speak publicly about the fallout from BNSF’s Hi-Viz attendance policy, fearing retaliation from the company. So former railroad employees, employees not working on the freight lines, and other labor leaders have stepped up to express their continued concern about the policy and the stalled contract negotiations between the unions representing rail workers and the National Carriers’ Conference Committee, which represents the major rail companies.

At the Sunday, May 15, rally in Fort Madison, Iowa, a group of around 40 railroad workers, their families, and representatives from organized labor in Southeast Iowa gathered outside the riverfront pavilion in front of the Amtrak station to voice their condemnation of the Hi-Viz policy and the untenable situation the rail companies have put workers in.

Along with vocalizing general issues with BNSF’s Hi-Viz policy, rally speakers and attendees highlighted a number of specific qualms with the policy, including the fact that it disproportionately penalizes workers who take time off for medical leave or union business. In order to earn back 4 lost points on one’s attendance tally, BNSF employees must work 14 days in a row. However, taking a day off for union business, or taking an FMLA-related day off, resets the 14-day count. For many workers, this may mean that they effectively don’t have the ability to earn lost points back.

For railroad workers continuing to work in the midst of the COVID-19 pandemic, the new attendance policy makes it increasingly difficult to care for themselves and their coworkers should they contract the coronavirus and fall ill. “It’s an impossible choice: go to work sick or see my family,” rail employee and SMART union representative Wes Eckstedt said on the day of the rally. “A lot of people are going to choose ‘see your family’ every time.”

Legislative representative Jordan Boone of SMART Local 445, an 18-year veteran of the railroad, spoke about the difficulties of parenting under the current policies. “I got five kids. We’ve never been able to really be on the forefront of the parental side of a family because of our job,” he said. “We make pretty good money, but it’s overtime—it’s blood money. With the High-Viz, we can’t even go to games anymore because of the amount of time we’re at work. It puts a huge burden on our wives and our kids.”

Jesse Case, Secretary-Treasurer and Principal Officer of Teamsters Local 238, railed against the policy in a fiery speech at the rally, calling out the billions of dollars investors like Warren Buffett make from the railroads. “We’re tired of choosing between people and profits, between families and our jobs,” Case told the crowd. “It’s the workers who keep these trains rolling. The employer provides the jobs but we provide the labor. Why should families suffer when people like Buffett are billionaires? We shouldn’t have to choose between our families and work when they’re going to make billions of dollars either way.”

In a statement to Tri States Public Radio after the May 15 rally, Ben Wilemon, External Corporate Communications Manager for BNSF, said, in part, “We currently have more train crew employees today than we did a year ago, coupled with a robust 2022 hiring plan that already has 300 new employees currently being trained.” According to current railroad employees, however, BNSF’s optimistic hiring plan may run into more than a few issues due to its current policies. “They’re having trouble hiring now because word’s getting out about how much they’re having each person do,” Eckstedt told TRNN.

“The railroads are having a hell of a time recruiting new employees and retaining the ones they have,” Ron Kaminkow, an Amtrak engineer in Reno, Nevada, Vice President of BLET Local 51, and General Secretary of Railroad Workers United, noted in a recent TRNN interview. “In the old days,” Kaminkow continues,

“the way the railroads recruited was largely through networks of existing employees: sons and daughters, brothers and cousins, and friends of theirs in the neighborhood and stuff. That’s how the word got out. And the railroad was a good job, so they never really had problems retaining and recruiting. Now that they do, they are actually making it worse because this network is gone. People are not advising their children to get jobs on the railroad. They’re not advising their friends and neighbors or others that they’re aware of who need a good job. I, myself, in good conscience, find it very, very difficult, and for years I advocated people go to work on the railroad, particularly in the freight service. And now I can’t in good conscience… advise a railroad job to anybody. It’s so sad.”

As BLET forcefully put it in a May release, “The time has come for our Nation’s railroads to be held accountable for their actions, and reconcile the long-term effects of their greed.”

For many rail workers, the path toward a solution begins with a conclusion to the years-long contract fight that has brought the industry to the point of a historic potential national rail shutdown. The negotiations, which began in January 2020, ground to a halt late in the spring. In an effort to settle the ongoing contract dispute, the Coordinated Bargaining Coalition of Rail Labor Unions, which features representatives from unions representing more than 100,000 rail workers nationwide, entered into in-person mediation sessions in late May before the National Mediation Board in Washington DC.

After weeks of unsuccessful mediation sessions, the National Mediation Board released both parties from mediation on June 14, declaring the negotiations at an impasse. This move by the NMB has set the stage for what could be a national railway shutdown within 90 days.

The release from mediation includes an offer of arbitration between the rail unions and the rail carriers. As Frank N. Wilner reports at Railway Age, the unions are expected to reject the offer.  **“Because binding arbitration inherently means that rank and file union members will not have the option to vote on their contract—which is their constitutionally mandated right—rail labor will reject the offer of binding arbitration,” Greg Regan, President of the Transportation Trades Department of the AFL-CIO, said in a June 14 statement on behalf of TTD’s 37 affiliated unions, including all of rail labor.

What happens next is a series of 30-day “cooling off” periods, which, as the name suggests, are intended to give both sides an opportunity to, well, cool off, reassess offers on the table, and reconsider paths to a resolution. As we speak, the cooling off period that began on June 17 is in effect.

At any point during the cooling off period, the Biden Administration could appoint a Presidential Emergency Board (PEB) of labor arbitrators that would assume responsibility for hearing both sides of the contract dispute and putting forth recommendations for settlement. This week, the US Chamber of Commerce sent a letter to the White House—the letter was also addressed to Secretary of Labor Marty Walsh and Secretary of Transportation Pete Buttigieg—urging President Biden “to help resolve the ongoing labor negotiations between the Class I freight railroads and the twelve rail unions by following historic precedent and appointing a Presidential Emergency Board.” If a PEB is not appointed, then the unions will have finally cleared the way for a national railway strike (and the carriers, for their part, can begin lockouts). One strike or lockout will likely lead to a domino effect across the entire rail industry.

If a PEB is appointed, however, then another 30-day period will begin, allowing for the arbitrators to collect evidence and offer their recommendations. Once they offer those recommendations, both sides of the conflict have another 30 days to attempt to come to a voluntary settlement. If one or both sides rejects the settlement, then the procedural provisions within the Railway Labor Act (RLA) will have run their course, freeing either side to initiate a strike or lockout. But other potential outcomes are still currently on the table and more likely. For instance, it’s possible that Congress will intervene by drafting emergency back-to-work legislation that will form the basis of a new contract.

The stalled contract negotiations are a massive indicator of how big of a gulf exists between the wants and needs of rail carriers and rail workers—and, as rail workers themselves argue, the rail carriers’ offers have been woefully insufficient in addressing the dangerous conditions that they have deliberately created for their workers in the service of their already bloated profit margins.

On June 24, BLET, which represents 23,000 rail workers at Class I railroads, began mailing ballots for a strike authorization vote in anticipation of a strike becoming necessary as the proceedings prescribed by the RLA run their course. “Let me emphasize that authorization does not mean a strike will occur, nor does it mean that all railroads may be struck,” BLET National President Dennis R. Pierce Said In Their Official Press Release. “Now is the time to deliver a unified message to the carriers that their contract proposals are unacceptable to BLET’s membership and that we stand united.”

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