• Wed. Oct 5th, 2022

As U.S. Railroad Shutdown Threatens, Industry Counts the Cost

ByStephanie M. Akbar

Sep 8, 2022

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LOS ANGELES, Sept 8 (Reuters) – A railroad strike or lockout could cost the U.S. economy $2 billion a day in production, threaten food and fuel supplies and stoke inflation already hot, according to an industry report released Thursday.

President Joe Biden appointed an Emergency Presidential Board (PEB) this summer to break the deadlock in labor negotiations between major U.S. railroads and unions representing 115,000 of their workers.

These groups have until shortly after midnight on September 16 to reach an agreement based on the council’s recommendations. Failure to do so will open the door to labor or management-led work stoppages – as well as congressional intervention. Read more

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The economic impact report released by the Association of American Railroads (AAR) warned that pulling the brakes at Union Pacific (UNP.N), Berkshire Hathaway (BRKa.N) BNSF, CSX (CSX.O) and other freight railways could disrupt shipments. of wheat and other grains during the critical harvest season, increasing coal deliveries to power plants, exacerbating shortages of vehicles and auto parts, and blocking e-commerce packages handled by United Parcel Service (UPS.N) and other senders.

Diverting shipments to road transport would require an additional 467,000 long-haul trucks per day, exceeding availability, AAR said.

The AAR report landed a day after the National Mediation Council convened a meeting with the railroads, unions and U.S. Labor Secretary Marty Walsh in a bid to avert work stoppages that could lead to additional costs to consumers just weeks before the midterm congressional elections that could change fortunes. of Biden’s Democratic Party. Read more

Unions and freight railways have so far reached tentative agreements covering 21,000 workers represented by five of the 12 unions involved in the talks. These employees could refuse to cross the picket lines if the two parties do not reach agreements to cover all workers.

“A nationwide rail work stoppage would result in an unnecessary $2 billion daily economic hit,” said AAR President and CEO Ian Jefferies. “If negotiations fail and result in a work stoppage, Congress must act to implement the PEB’s recommendations.”

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Reporting by Lisa Baertlein in Los Angeles; Editing by David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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