US rail critical to economy as strike approaches

Congress is under arms to pass legislation that ends the threat of a nationwide rail strike. Time is running out. A strike could happen as early as next week, with damaging disruptions to the supply chain set to begin in a matter of days.

As lawmakers prepare their arguments for or against interfering in stalled workers’ negotiations between the major freight railroads and the four tense unions, one thing that is not up for debate is whether the economy will be paralyzed if the trains stop working.

Aerial view of freight cars sitting in a rail yard near shipping containers in Wilmington, Calif, on November 22, 2022. (Mario Tama/Getty Images / Getty Images)

Scrolling text Security End Change Change %
UNP UNION PACIFIC CORP. 212.85 +4.36 +2.09%
CSX CSX Inc. 32.17 +0.47 +1.48%
NSC NORFOLK GUNEY INC. 253.24 +4.61 +1.85%

President Joe Biden warned on Tuesday that as many as 765,000 Americans “could be unemployed in the first two weeks alone” if railroad jobs stopped.

The American Railroad Association, which represents giant carriers like BNSF, CSX, Norfolk Southern and Union Pacific, estimates that closing a railroad will cost the US economy $2 billion a day, and every American will feel it.

BIDEN: I’M SURE THE NATIONAL RAILWAY STRIKE WILL BE AVOIDED

The U.S. rail system carries the equivalent of 467,000 long-haul trucks of cargo each day, carrying dangerous chemicals, fertilizers, clothing, household goods and perishable goods. If a shutdown occurs, which is already understaffed in the trucking industry and currently lacks an estimated 80,000 drivers, it will be impossible for other shipping options to fill the void.

It is estimated that stopping the rail system would be devastating for the economy in normal times, but disastrous in today’s economic environment. Supply chains still trying to recover from the COVID-19 pandemic disruptions will be largely destroyed by an ongoing labor shortage and a lack of alternatives that leave little room for contingency plans. As inflation continues to hover near its four-year high, everyday commodity prices will rise further.

railway strike freight

Lumber-laden freight cars stand on the tracks at the Port of Los Angeles in Los Angeles, California, on November 22, 2022. (Mario Tama/Getty Images / Getty Images)

RETAIL TRADING GROUP SAYS RAILWAY STRIKE DROPPED HOLIDAY SHOPPING AND THE GENERAL ECONOMY

Aside from the current economic woes, the country is looking at the potential of a strike midway through the holiday shopping season that affects both retailers and customers alike.

Even online purchases can be delayed. AAR says UPS could be the largest rail customer in the country, and closing a single train carrying 100 UPS containers would prevent 200,000 packages from reaching customers’ doors.

American ports, plagued by congestion amid the post-pandemic surge in demand last year, will undoubtedly face cutbacks again if a rail strike happens, given that roughly 30% of US cargo shipments by weight are transported by rail.

Port of Los Angeles trucks

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

BUSINESS GROUPS CALL ON CONGRESS TO ACT ‘IMMEDIATE’ TO PREVENT RAILWAY STRIKE

Beyond industries that have come to a standstill, Amtrak and other commuter trains using the railroads of major rail companies will be parked, disrupting the journey of nearly 7 million passengers a day.

The railroad industry’s far-reaching impact on the economy is the reason behind Congress’ passing the Railroad Labor Act in 1926 in the first place, giving it the power to intervene and impose conditions to prevent a strike.

The intervention, however, is met with opposition from both sides of the political corridor and sets the stage for a possible stalemate that could continue beyond the December 9 deadline for the Congressional strike.

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

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