Whew — that was close.

With only a few hours remaining before the cooling-off period expired and a nationwide strike could be called, 12 unions and the major freight railroads reached tentative agreements on new contracts.

At stake was the U.S. economy. About 30% of U.S. freight moves by railroad. Without rail service, freight would flood onto other modes of transportation such as trucks, which are already hamstrung by a severe driver shortage.

The new deal would give the 115,000 union members an immediate 14% raise backdated to 2020. Over the five years of the contract, they would receive a 24% raise.

What’s missing from the agreement is a guarantee the railroads will improve their service. It has been so bad at least one company, Foster Farms, has complained out loud that late deliveries of feed have caused major problems for its California chicken farms.

To remedy the problem, the federal Surface Transportation Board ordered the Union Pacific Railroad to get its act together. The railroad had net revenue of $6.5 billion last year but has trouble getting a trainload of corn to California from the Midwest on time.

Other railroads have for years received similar complaints about tardiness, a critical problem when shipping agricultural crops.

The federal government is bird-dogging the railroads in an attempt to push them toward better service.

While we cannot predict with confidence any improvements in service, we can safely say that rail freight rates will go up.

But even if rail union members ratify their new agreement, trouble lurks in another link of the supply chain — the 29 container ports on the West Coast.

The International Longshore Workers Union, which represents 22,000 dock workers, has been negotiating a new contract with the Pacific Maritime Association, whose 70 members include ocean carriers, terminal operators and stevedore companies.

The ports handle 60% of imports from Asia and most containerized agricultural exports to that continent such as potatoes, potato products, nuts, fruits and vegetables. Grain is shipped overseas via bulk carriers.

The old contract expired July 1, and both sides have promised to play nicely while they negotiate.

However, a stumbling block has emerged over union jurisdiction at the Port of Seattle. The ILWU wants its members to maintain some of the port’s equipment now handled by members of the International Association of Machinists and Aerospace Workers.

The ILWU is refusing to talk about wages or other big-ticket items until that is straightened out, presumably in its favor.

In the meantime, ocean carriers continue to profit from the supply chain snarl they helped create. According to the ILWU’s website, carriers last year generated $190 billion in annual profits, about three times as much as the previous year.

“Cosco Shipping reported $14 billion in annual profits in 2021, nine times more than in 2020, while Hapag-Lloyd’s pre-tax income more than quadrupled to $12.8 billion last year,” according to the website. Both are PMA members.

We won’t pick sides in this battle, but we do know that U.S. ag exporters need timely, predictable and affordable service from the PMA and the ILWU.