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After the Biden administration brokered a labor agreement between freight rail companies and their unions, one supply chain logistics expert warned that the agreement could still have “worrisome” economic repercussions.

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“More worryingly, the impact is coming from some of the less profitable sectors of the economy, especially trucking and other industries that will see this… as a sign that labor has tremendous power,” FreightWaves CEO Craig Fuller told FOX Business. Maria Bartiromo Tuesday.

“And to a large extent,” the CEO continued, “the labor movement will be strengthened.”

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Following 20 hours of negotiations that began last Wednesday, the railroad companies and their respective unions have reached a labor agreement that tentatively provides for a 24% increase in workers’ wages over a five-year period, additional paid leave, and $5,000 retroactive bonuses. until 2020. .

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Significant wage increases for railroad workers, as Fuller warned on Morning with Mary, could convince other utilities to reconsider their compensation and working conditions, and force employers to give in to demands.

“Unfortunately, since there are not many alternatives for certain industries, especially ports, we will have to come to terms with this and simply accept the reality that labor has much more power today than it has in the past two decades,” Fuller explained.

Industries that intersect between basic infrastructure and efficient public services, such as freight rail and port systems, may wind down.

“This is not only potentially putting pressure on companies, but more worryingly, it is putting pressure on the entire economy,” Fuller said. “And we saw what happens when there were supply chain disruptions on the West Coast last year. This is definitely a concern.”

The tentative deal, which was supposed to be the catalyst for a nationwide railroad strike, has already drawn backlash from local union representatives. District 19 members of the International Association of Machinists and Aerospace Workers have already rejected the agreement, although they have agreed to postpone the strike until September 29 to give more time for negotiations and voting by other unions.

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Despite opposition, Fuller predicts the deal will be formalized on Thursday, calling it a “big win” for unions and rail workers.

“I think it was pretty much pressure from the federal government to play Joe Biden in the sense that if he doesn’t pass, we are talking about catastrophic economic consequences because what the railroads carry is basically are not finished goods, but they are basically raw materials – things like energy, food and [agriculture]— said the logistics expert. “These products are experiencing significant inflation, but they are also critical to everyone’s livelihood.”

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Daniella Genovese of FOX Business contributed to this report.