American consumers and nearly every industry will be affected if freight trains grind to a halt next month. One of the biggest rail unions rejected its deal Monday, joining three others that have failed to approve contracts over concerns about demanding schedules and the lack of paid sick time. That raises the risk of a strike, which could start as soon as Dec. 5, per the AP. It wouldn’t take long for the effects of a rail strike to trickle through the economy. Many businesses only have a few days’ 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. That's not to mention the commuters who would be left stranded because many passenger railroads use tracks owned by the freight railroads.
The stakes are so high for the economy that Congress is expected to intervene and impose contract terms on railroad workers. The last time US 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. Here are some of the expected impacts:
- Food: 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. About 30% of all packaged food in the US is moved by rail, he said. That percentage is much higher for denser, heavier items like cans of soup. Trucks would not be able to make up the difference.
- Travel: 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’s long-distance trains run over the freight network.
- $2B a day: Railroads haul about 40% of the nation's freight each year. The railroads estimated that a rail strike would cost the economy $2 billion 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 would increase even more, and the economy could be thrust into a recession.
- Chemicals: 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. One example: This means the chlorine that water treatment plants rely on to purify water, which they might only have about a week's supply of on hand, would become hard to get.
- Animals: 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.
- Auto sales: 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. 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.
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