General Merchandise/HBC

Rail Strike Threatens Retail

Industry associations urge Congress to prevent massive disruption to flow of fuel, food, goods
Photograph: Shutterstock

UPDATE 3: President Biden signed House Joint Resolution 100 on Dec. 3 to avert the rail strike.

UPDATE 2: By an 80-15 vote, the U.S. Senate passed a bill on Dec. 1 to bind rail companies and workers to the proposed settlement between the rail companies and union leaders, reported the Associated Press. The measure now goes to President Biden’s desk for his signature.

UPDATE: The U.S. House of Representatives passed a bill Nov. 30 that would bind companies and workers to a proposed settlement reached in September but rejected by some of the unions involved, reported the Associated Press. The measure passed by a vote of 290-137 and now heads to the Senate. If approved there, it will go to the desk of President Biden, who requested the action, to be signed.

WASHINGTON — More than 400 groups are calling on Congress to intervene in an ongoing railroad labor standoff that threatens to idle shipments of food and fuel, add stress to an already compromised supply chain, strand rail travelers and inflict billions of dollars of economic damage.

Workers in four unions have rejected a tentative contract deal announced in September, while eight approved it, said a Reuters report.

The convenience-store, fuel, grocery, food and retail groups include the National Association of Truck Stop Operators (NATSO), Society of Independent Gasoline Marketers of America (SIGMA), National Retail Federation (NRF), American Petroleum Institute (API), Growth Energy, National Confectioners Association (NCA) and National Restaurant Association, among many other federal, state and local associations, according to a letter to congressional leaders posted by the U.S. Chamber of Commerce.

“Many businesses will see the impacts of a national rail strike … through service disruptions and other impacts potentially as early as Dec. 5,” the groups said in the letter.

“The risks to our nation’s economy and communities simply make a national rail strike unacceptable,” the letter said. “Therefore, absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow.”

A rail traffic stoppage could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation and cost the American economy as much as $2 billion per day by unleashing a cascade of transport woes affecting U.S. energy, agriculture, manufacturing, healthcare and retail sectors, said the news agency.

“A rail stoppage would immediately lead to supply shortages and higher prices. The cessation of Amtrak and commuter rail services would disrupt up to 7 million travelers a day. Many businesses would see their sales disrupted right in the middle of the critical holiday shopping season. Even a short-term rail strike would have enormous impacts,” said the letter.

The Association of American Railroads has warned that an additional 467,000 truck deliveries would be needed per day to keep businesses and consumers supplied with the goods that are normally transported by rail. The trucking industry is already struggling to resume pre-pandemic delivery levels because of a shortage of drivers.

In a separate statement, Tiffany Wlazlowski Neuman, vice president of public affairs for NATSO, said, “If a work stoppage were to occur, it would immediately disrupt fuel marketers’ ability to ensure a reliable and stable supply of fuel for U.S. consumers and for the nation’s commercial fleets. The U.S. economy in many ways revolves around transportation fuel, and if the necessary components to that fuel cannot get to where they are needed, the market impact will be drastic. The economic consequences will be catastrophic.”

“A prolonged railroad shutdown will constrain the nation’s fuel supply by disrupting the availability of ethanol, which is often an essential component of gasoline, and diesel exhaust fluid, which most heavy-duty trucks need to run,” she said.

”The White House has called a rail shutdown “unacceptable.” President Joe Biden’s Presidential Emergency Board in August released the framework for a tentative deal forged in September between major carriers like Union Pacific Corp. and a dozen unions representing 115,000 workers, the report said.

“I am calling on Congress to pass legislation immediately to adopt the tentative agreement between railroad workers and operators—without any modifications or delay—to avert a potentially crippling national rail shutdown,” the President said on Nov. 28. “This agreement was approved by labor and management negotiators in September. On the day that it was announced, labor leaders, business leaders and elected officials all hailed it as a fair resolution of the dispute.”

The deal provides a 24% pay raise for rail workers, improved health care benefits and unscheduled leave for medical needs.

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