US President Joe Biden announced a tentative agreement with railway workers just hours before they were due to start a strike, World Grain reported.

Rail workers and union representatives had been in negotiations for 20 hours at the Labour Department when the tentative deal was reached on 15 September, World Grain reported Associated Press as saying.

The agreement had now been passed to union members for a vote following a post-ratification cooling off period of several weeks, the report said.

“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned,” Biden was quoted as saying.

“The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”

If the strike had gone ahead, the US economy would have made a US$2bn/day loss, according to a report by the Association of American Railroads (AAR), which also noted that railways transport the equivalent of 1.5M/year car-loads of grain.

The National Grain and Feed Association (NGFA) said rail moved about 25% of all US grain and the strike had been scheduled to take place at the same time as the country’s corn and soyabean harvest was progressing.

A prolonged strike would have left grain elevators without adequate storage space for the new crop and caused problems for grain processors both in terms of receiving raw materials and shipping end products, World Grain wrote.

It would also have hit an already struggling economy, the report said.

The NGFA, which had been lobbying for Congress to pass legislation to keep the railways operating if the two sides hadn’t been able to reach an agreement, praised the railways and rail union representatives for reaching the preliminary agreement in advance of the 16 September deadline, according to the report.

“The efficient operation of our rail network is crucial to a functioning agricultural economy,” NGFA president and CEO Mike Seyfert was quoted as saying.

“NGFA members, which include 1,000 companies that handle US grains and oilseeds, commend both parties for working in good faith toward an agreement and preventing severe economic damage.”

The last railway strike in the USA took place in 1992, when Congress had passed legislation ending a two-day rail shutdown, World Grain wrote.