Railroads in the US crucial to economy as strike looms

Congress is under fire to pass legislation that would end the threat of a nationwide railroad strike. Time is running out. A strike could happen as early as next week, with damaging supply chain disruptions set to begin within days.

As lawmakers prepare their arguments for or against intervening in the stalled labor negotiations between the major freight railroads and four staunch unions, one thing is not up for debate: whether the economy would be paralyzed if the trains stopped running.

Aerial view of freight cars in a shipping container yard on November 22, 2022 in Wilmington, California. (Mario Tama/Getty Images/Getty Images)

Ticker Safety Last Change Change %
UNP UNION PACIFIC CORP. 212.85 +4.36 +2.09%
CSX CSX CORP. 32.17 +0.47 +1.48%
NSK NORFOLK SOUTHERN CORP. 253.24 +4.61 +1.85%

President Joe Biden warned Tuesday that if rail work comes to a halt, up to 765,000 Americans “could become unemployed in the first two weeks alone.”

The Association of American Railroads, which represents giant carriers including BNSF, CSX, Norfolk Southern and Union Pacific, estimates that a rail closure would cost the U.S. economy $2 billion a day — and every American would feel it.

BIDEN: ‘I AM SURE OF CONFIDENCE’ CRAZYING NATIONAL RAIL TATTOO WILL BE AVOIDED

The U.S. rail system carries a load equivalent to that of 467,000 long-haul trucks each day, carrying hazardous chemicals, fertilizers, clothing, household and perishable goods. With the trucking industry already at a deficit and an estimated 80,000 drivers currently missing, it would be impossible for other shipping options to fill the gap if a shutdown were to take place.

Shutting down the rail system would be destructive to the economy in normal times, but is expected to be catastrophic in the current economic environment. Supply chains still recovering from the disruptions of the COVID-19 pandemic would be decimated, with continued labor shortages and a lack of alternatives leaving little room for contingency planning. Prices of everyday goods would continue to rise as inflation continues to hover near its four-decade high.

rail strike freight

Freight train cars loaded with wood stand on rails at the Port of Los Angeles on November 22, 2022 in Los Angeles, California. (Mario Tama/Getty Images/Getty Images)

RETAIL TRADE GROUP SAYS RAIL STRIKE COULD RELAX HOLIDAY SHOPPING, GENERAL ECONOMY

On top of the current economic woes, the country is facing the potential of a strike in the middle of the Christmas shopping season – impacting retailers and customers alike.

Even online purchases would be delayed. The AAR says UPS is arguably the largest rail customer in the country, and shutting down a single train carrying 100 UPS containers would prevent 200,000 packages from reaching the customer’s door.

US ports, plagued by blockades last year amid a post-pandemic surge in demand, would no doubt be hit again by disruptions if a rail strike were to take place, as nearly 30% of US freight is transported by rail.

Trucks in the Port of Los Angeles

Shipping containers and trucks are seen at the Port of Los Angeles in San Pedro, California, November 17, 2021. (Apu Gomes/AFP via Getty Images/Getty Images)

BUSINESS GROUPS ADDRESS CONGRESS TO TAKE ‘IMMEDIATE’ MEASURES TO AVOID RAILWAY STRIKES

Outside of industries that would come to a standstill, Amtrak and other commuter trains using the tracks of the major railroads would be parked, disrupting the travel of some 7 million passengers a day.

The far-reaching impact of the railroad industry on the economy is why Congress passed the Railroad Labor Act in the first place in 1926, giving itself the power to intervene and impose conditions to prevent a strike.

But the intervention is already meeting opposition from both sides of the political aisle, paving the way for a possible impasse in Congress that could continue past the December 9 strike deadline.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Chad Pergram and Reuters of FOX News contributed to this article.

Leave a Reply

Your email address will not be published. Required fields are marked *