{"id":37151,"date":"2022-11-23T01:29:55","date_gmt":"2022-11-23T08:29:55","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/a-rail-strike-looms-and-impact-on-u-s-economy-could-be-broad\/"},"modified":"2026-03-31T02:35:38","modified_gmt":"2026-03-31T08:35:38","slug":"a-rail-strike-looms-and-impact-on-u-s-economy-could-be-broad","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/a-rail-strike-looms-and-impact-on-u-s-economy-could-be-broad\/","title":{"rendered":"A rail strike looms, and impact on U.S. economy could be broad"},"content":{"rendered":"

\"A
A worker walks along tracks at a BNSF rail yard in September in Kansas City. American consumers and nearly every industry will be affected if freight trains grind to a halt next month. Charlie Riedel\/The Associated Press<\/span>Charlie Riedel<\/span><\/figcaption><\/figure>\n<\/p>\n

OMAHA, Neb. \u2013 American consumers and nearly every industry will be affected if freight trains grind to a halt next month.<\/p>\n

One of the biggest rail unions rejected its deal Monday<\/a>, joining three others that have failed to approve contracts over concerns about demanding schedules<\/a> and the lack of paid sick time<\/a>. That raises the risk of a strike, which could start as soon as Dec. 9 under a deadline that was pushed back Tuesday.<\/p>\n

It wouldn\u2019t take long for the effects of a rail strike to trickle through the economy. Many businesses only have a few days\u2019 worth of raw materials and space for finished goods. Makers of food, fuel, cars and chemicals would all feel the squeeze, as would their customers.<\/p>\n

That\u2019s not to mention the commuters who would be left stranded because many passenger railroads use tracks owned by the freight railroads.<\/p>\n

The stakes are so high for the economy that Congress is expected to intervene and impose contract terms on railroad workers. The last time U.S. railroads went on strike was in 1992. That strike lasted two days before Congress intervened. An extended rail shutdown has not happened for a century, partly because a law passed in 1926 that governs rail negotiations made it much harder for workers to strike.<\/p>\n

Here are some of the expected impacts of a rail strike:<\/p>\n

$2 billion a day<\/div>\n

Railroads haul about 40% of the nation\u2019s freight each year. The railroads estimated that a rail strike would cost the economy $2 billion<\/a> a day in a report issued earlier this fall. Another recent report put together by a chemical industry trade group projected that if a strike drags on for a month some 700,000 jobs would be lost as manufacturers who rely on railroads shut down, prices of nearly everything increase even more and the economy is potentially thrust into a recession.<\/p>\n

And although some businesses would try to shift shipments over to trucks, there aren\u2019t nearly enough of them available. The Association of American Railroads trade group estimated that 467,000 additional trucks a day would be needed to handle everything railroads deliver.<\/p>\n

\"FILE
FILE \u2013 A BNSF railroad train hauling carloads of coal from the Powder River Basin of Montana and Wyoming is seen east of Hardin, Mont., on July 15, 2020. Business and top officials are bracing for the possibility of a nationwide rail strike on Friday, Sept. 16, 2022, while talks continue between the nation's largest freight railroads and their unions. (AP Photo\/Matthew Brown, File)<\/span>Matt Brown<\/span><\/figcaption><\/figure>\n<\/p>
Chemicals run dry<\/div>\n

Chemical manufacturers and refineries will be some of the first businesses affected, because railroads will stop shipping hazardous chemicals about a week before the strike deadline to ensure that no tank cars filled with dangerous liquids wind up stranded.<\/p>\n

Jeff Sloan with the American Chemistry Council trade group said chemical plants could be close to shutting down by the time a rail strike actually begins because of that.<\/p>\n

That means the chlorine that water treatment plants rely on to purify water, which they might only have about a week\u2019s supply of on hand, would become hard to get. It would be hard for manufacturers to make anything out of plastic without the chemicals that are part of the formula. Consumers will also pay more for gasoline if refineries shut down, either because they can\u2019t get the ingredients they need to make fuel or because railroads aren\u2019t available to haul away byproducts like sulfur.<\/p>\n

Chemical plants also produce carbon dioxide as a byproduct, so the supply of carbon dioxide that beverage makers use to carbonate soda and beer would also be restricted, even though the gas typically moves via pipelines.<\/p>\n

\"People
People ride an Amtrak Acela train in Chester, Pennsylvania \u2013 traveling from Penn Station in New York City to Union Station in Washington D.C. \u2013 on Friday, September 30, 2022. (AP Photo\/Ted Shaffrey)<\/span>Ted Shaffrey<\/span><\/figcaption><\/figure>\n<\/p>
Passenger problems<\/div>\n

Roughly half of all commuter rail systems rely at least in part on tracks that are owned by freight railroads, and nearly all of Amtrak\u2019s long-distance trains run over the freight network.<\/p>\n

Back in September, Amtrak canceled all of its long-distance trains days ahead of the strike deadline to ensure passengers wouldn\u2019t be left stranded in remote parts of the country while still en route to their destination.<\/p>\n

And major commuter rail services in Chicago, Minneapolis, Maryland and Washington state all warned then that some of their operations would be suspended in the event of a rail strike.<\/p>\n

Food fears<\/div>\n

It would take about a week for customers to notice shortages of things like cereal, peanut butter and beer at the grocery store, said Tom Madrecki, vice president of supply chain for the Consumer Brands Association.<\/p>\n

About 30% of all packaged food in the U.S. is moved by rail, he said. That percentage is much higher for denser, heavier items like cans of soup.<\/p>\n

Some products, like cereal, cooking oils and beer, have entire operations built around rail deliveries of raw ingredients like grain, barley and peanuts, along with shipments of finished products.<\/p>\n

Those companies typically keep only two to four days\u2019 worth of raw ingredients on hand because it\u2019s expensive to store them, Madrecki said, and grocers also keep a limited supply of products on hand.<\/p>\n

Madrecki said big food companies don\u2019t like to discuss the threat of a rail strike because of worries about product shortages can lead to panic buying.<\/p>\n

Hungry herds<\/div>\n

Any disruption in rail service could threaten the health of chickens and pigs, which depend on trains to deliver their feed, and contribute to higher meat prices.<\/p>\n

\u201cOur members rely on about 27 million bushels of corn and 11 million bushels of soybean meal every week to feed their chickens. Much of that is moved by rail,\u201d said Tom Super, a spokesman for the National Chicken Council, a trade group for the industry raising chickens for meat.<\/p>\n

The National Grain and Feed Association said a rail strike now would hit pork and chicken producers in the southern U.S. hardest, because their local supply of corn and soybeans from this year\u2019s harvest is likely exhausted and they\u2019d have to ship feed by truck, dramatically increasing costs.<\/p>\n

\u201cThey only have so much storage. They can\u2019t go without rail service for too long before they\u2019d have to shut down the feed mills and they run into problems,\u201d said Max Fisher, the NGFA\u2019s chief economist.<\/p>\n

Retail risks<\/div>\n

Jess Dankert, the vice president for supply chain at the Retail Industry Leaders Association, said retailers\u2019 inventory is largely in place for the holidays. But the industry is developing contingency plans.<\/p>\n

\u201cWe don\u2019t see, you know, canceling Christmas and that kind of narrative,\u201d Dankert said. \u201cBut I think we will see the generalized disruption of really anything that moves by rail.\u201d<\/p>\n

David Garfield, a managing director with the consulting firm AlixPartners, said a rail strike could still impact holiday items shipped to stores later in December, and would definitely hamper stocking of next season\u2019s goods.<\/p>\n

Retailers are also concerned about online orders. Shippers like FedEx and UPS use rail cars that hold roughly 2,000 packages in each car.<\/p>\n

Automobile angst<\/div>\n

Drivers are already paying record prices and often waiting months for new vehicles because of the production problems in the auto industry related to the shortage of computer chips in recent years.<\/p>\n

That would only get worse if there is a rail strike, because roughly 75% of all new vehicles begin their journey from factories to dealerships on the railroad. Trains deliver some 2,000 carloads a day filled with vehicles.<\/p>\n

And automakers may have a hard time keeping their plants running during a strike because some larger parts and raw materials are transported by rail.<\/p>\n

Associated Press Writers David Pitt in Des Moines, Iowa, and Dee-Ann Durbin in Detroit contributed to this report.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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