Railroads and workers have faced years of challenging negotiations that meet the most important demands of its members, including wages and time off.
The impact that the train freight has on the U.S. if it doesn’t work at normal levels, will be reflected in snarl supply chains, disrupting agricultural deliveries and costing the US economy more than $2 billion a day, at a time of elevated inflation, the stoppage could result in plant shutdowns, lost jobs and higher costs for consumers and businesses, say experts.
The heads of the Transportation Division union and the Brotherhood of Locomotive Engineers and Trainmen union issued a joint statement blasting the move, which the railroads announced late September 9th.
“The fact that we are already seeing some impacts of contingency planning by railways again demonstrates that a shutdown of our freight rail system is an unacceptable outcome for our economy and the American people, and all parties must work to avoid that.”, said the Labor Department in a statement.
If railways suddenly shut down, not only will affect this industry, but also the passengers and ocean transport.
This would mean a big mess, “which would literally disrupt the whole supply chain”, expressed the executive director of the United Shippers Alliance, Graves.
On the other hand, more than 467 thousand trucks a day would be needed to handle all the cargo trains haul and there is already a shortage of truck drivers, this rail disruption will create havoc in the supply chain and fuel inflationary pressures across the board, highlighted the railroad trade group.
If the two sides can’t agree on a deal by September 16th, Congress is expected to step in to block a strike because of the dire economic consequences. So many businesses rely on railroads to deliver their raw materials and finished products. Some people are hopeful that a strike could be averted, but businesses should be prepared to act if not.
Update on Railroad Labor Negotiations
Rail unions reached tentative agreements with railroad management on new contracts after all-night negotiations lasting until early Thursday, September 15th, morning, pending ratification by union membership. But it’s good news for a wide range of businesses that depend upon the freight railroads to continue to operate, and for the wider US economy. About 30% of the nation’s freight moves by rail. The deal gives the union members an immediate 14% raise with back pay dating back to 2020 and raises totaling 24% during the five-year life of the contract until 2024.
At The ILS Company, our goal is to keep our customers informed of external events affecting their supply chain and be ready to provide alternative solutions.
This allows our customers to avoid costly disruptions to their supply chain. We have a large and professional over-the-road (OTR) network. If you are in need to change from rail to an OTR mode of transport during this possible crisis, ILS would be happy to work out the best solution for you. We have all the tools to satisfy your business needs while our team is accompanying you through the process.