SIMIC

President Joe Biden, in a statement, called the tentative deal "an important win for our economy." A strike or lockout could have happened just after midnight last Friday, reports IHS Media.

"These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned," Mr Biden said.

"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."

The leadership of the country's two largest rail unions - the Brotherhood of Locomotive Engineers and Trainmen (BLET) and Sheet Metal Air, Rail, and Transportation Workers (SMART-TD) - said in a statement they will submit the tentative agreement to their rank and file for a vote. No specific timeline was provided, though a spokesperson for SMART-TD said it will be "a matter of weeks."

"This contract will not become final until our members have an opportunity to review its terms and approve it through a ratification vote," the unions said in their statement.

The Association of American Railroads, representing the country's freight railroads, said in a brief statement that the tentative deal covers about 60,000 employees.

The tentative deal came after a 20-hour marathon negotiating session was held all day last Wednesday and into Thursday at the Department of Labour, with Labour Secretary Marty Walsh hosting leadership from railroads and the unions.

A Presidential Emergency Board (PEB) that was created in July recommended a compounded 24 per cent wage increase covering 2020 through 2024 and a total of US$5,000 in bonus payments for workers. But sources said that work conditions and lifestyle concerns, rather than compensation, were the main obstacle to a deal.