September 16 Looms As Deadline For Major Railroad Strike And 'National Economic Disaster'

As September 16th Deadline Looms, Major Freight Railroads Prepare for Possible Strike Costing US Economy More than $2 Billion a Day

Margaret Flavin

In an already fragile economy with inflation at 40-year highs, out of control government spending and broken supply chains,  major freight railroads are preparing for a possible strike and service disruption as a September 16th deadline looms. The supply chain disaster under the Biden administration is poised to become even worse.

America’s freight railroads cover a nearly 140,000 mile network across 49 states.  A strike would shutdown 7,000 Class I trains per day as well as disrupting passenger and commuter trains. Freight trains transport nearly every sector of our economy including agricultural, industrial, wholesale, retail and resource-based sectors.

The Association of American Railroads  details the devastating impact on the economy if the strike proceeds.

Major freight railroads, in a bid to apply pressure on unions and Congress, say a strike that could come after a key deadline passes next week would cost the economy more than $2 billion a day and disrupt deliveries of all kinds of goods and passenger traffic nationwide.

The Association of American Railroads trade group on Thursday issued a report estimating the dire consequences of a strike. Their report came a day after Labor Secretary Marty Walsh took part in talks in a bid to hammer out an agreement.

A strike or lockout won’t be allowed until next Friday at the soonest under the federal law that governs railroad negotiations.

The U.S. Chamber of Commerce on Monday called for urgent action to avoid a strike and a “national economic disaster.”

“A shutdown of the nation’s rail service would have enormous national consequences. It would lead to perishable foods such dairy, fruits, and vegetables spoiling at their points of origin, would halt Amtrak service … disrupt materials and goods being delivered to factories and ports, and would inhibit the transport of heating fuel and other important fuels and chemicals,” the Chamber said. “The costs of such a shutdown to the U.S. economy could come out to $2 billion per day.”

US supply chain could take another critical blow as railroads prepare “contingency plans” for large-scale labor strike

Lance D Johnson

The U.S. supply chain could take another critical blow, as tens of thousands of railroad workers prepare for a major labor strike. The Association of American Railroads (AAR) has failed to reach a deal with two of the largest labor unions in the railroad industry. Approximately 90,000 railroad workers could go on strike by late September. The failed negotiations have prompted Union Pacific and CSX to announce “contingency plans,” as a full-blown work stoppage seems inevitable.

The American Baker’s Association, representing more than 300 companies, warned that “Even a temporary interruption would create a devastating ripple effect” across US supply chains.

Norfolk Southern will enact their own “contingency plans” across their network. This will include a “controlled shut down” starting Friday September 16th. This is when the “cooling-off period” expires. The Railway Labor Act was implemented by Biden officials two months ago to prevent a strike. It requires a 30-day cooling period. After September 16, the railroad industry will have to appeal to Congress to reach a deal with the labor unions.

The AAR warns that the major railroad strike would take a $2 billion per day toll on the US economy. Approximately 29 percent of all US freight is transported via rail. About half of all railroad freight includes bulk commodities like food, energy, metals, chemicals, and wood products. The other half includes consumer goods and household items. The backlog in shipments will inevitably contribute to higher food and energy costs.

Over three fourths of the freight is transported by just a handful of companies: BNSF, Union Pacific, Class I intermodal traffic, CSX and Norfolk Southern. BNSF Railway is urging its customers to contact Congressional lawmakers so they will “intervene” to “quickly resolve the service disruption.” BNSF is preparing to secure the most important shipments starting Monday, September 19th.

As the cost of energy, food, and housing skyrockets under the Biden administration, working Americans will increasingly look for higher wages. More labor strikes are only inevitable now, as hard-earned money loses its spending power in the hyper-inflated economy. More workers are going to demand salary increases just to pay the rent and survive in a reeling economy that has been irreparably harmed by the useless Biden administration.