5 ways a national railroad strike could impact you

Fears grow over possible rail union strike


Fears grow over looming railroad labor union strike

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Freight trains may not be top of mind for most consumers, but a potential national railroad strike could soon impact almost every aspect of commerce in the U.S., affecting the daily lives of millions of Americans. 

A work stoppage could begin early Friday morning just after midnight. That’s when a 30-day “cooling-off” period ends under terms of a law called the Railway Labor Act, which governs contract talks in the railroad and airline industries. The Biden administration has been working to avert a possible railroad strike before that deadline. 

Halting freight trains could cost the U.S. economy more than $2 billion per day, according to the Association of American Railroads. If a shutdown were to last more than a few days, the impact would likely be felt by millions of consumers as it would disrupt shipping of retail products, coal and manufacturing components. Commuters would also be out of luck, as many passenger trains run on the freight tracks that would be idled in a strike, experts say. 

A strike “would really impact day-to-day life and basics of how we live in society,” Rachel Premack, editorial director of supply-chain market research company FreightWaves, told CBS MoneyWatch. 

She added, “There are all these weird random things we don’t think about day to day but are pretty foundational to our lives” that are transported by trains, such as cement and lumber.

If a stoppage lasted only one to three days, the impact may be muted, especially given that there’s less freight traffic on Fridays, Saturdays and Sundays, according to Jason Miller, chairperson of supply chain management at Michigan State University. But if a strike lasted until the middle of next week or beyond, “that’s when it becomes very disruptive,” he told CBS News.

Canceled commuter trains

Already, some travelers are feeling the impact, with Amtrak on Wednesday suspending all of its long-distance routes to ensure the rail service’s trains can reach their final destinations ahead of the possible strike. Amtrak and some commuter train services around the U.S. rely on freight tracks to operate passenger trains, which is why some are bracing for potential disruptions.

Metra, a Chicago-area train service, warned Tuesday that nine of its 11 lines could be affected because they use freight lines or are dispatched by freight companies. About 14 million passenger trips were taken on Metra last year, according to the service. Two of its lines, the Metra Electric and Rock Island lines, would continue to run because it owns, operates and controls those tracks, it added. 

Other commuter lines that have warned of possible service disruptions include the Maryland Transit Administration and the San Joaquin Regional Rail Commission in California. 

Longer wait times for new cars

Because most new vehicles are shipped from the factory or dock by rail, there is not enough truck capacity to handle all those vehicles in case of a strike. That would mean even longer wait times for dealers and motorists to get their hands on new cars.

A strike could also interfere with vehicle production because automakers receive some parts and raw materials by rail.

Higher energy costs 

Coal, which is mostly transported by train, provides about 20% of U.S. power. If deliveries are delayed, that could cause energy prices to rise, Michigan State’s’ Miller said. 

Many hazardous fuels or gases are also shipped by rail because it’s safer than being transported by truck, said Bindiya Vakil, CEO of Resilinc, a Fremont, California-based supply-chain tracking company. “Because of all those things, you could see transportation of your gas shipments to your local gas stations be disrupted — a lot of that is transported by rail as well.”

Bare shelves at stores

The railroads have announced plans to stop shipping refrigerated items ahead of the strike deadline, so there could be disruptions in deliveries of produce, meat and other items.

Food producers also could be affected. Agricultural groups say that even a brief strike would interrupt shipment of feed to livestock and to poultry producers, which could increase the price of meat. 

Likewise, many building supplies are shipped via train, ranging from lumber to cement, so there could be shortages of these materials at home supply stores. Builders would also be impacted if they are unable to get supplies of lumber and other needed products. 

Higher inflation

Experts say additional pressure on energy and food costs would likely add to the hottest inflation in 40 years now impacting household budgets. But it’s hard to gauge exactly how large the impact could be, since that will be determined by the length of the strike, if it occurs. 

Many experts believe a strike would not last long because Congress would be likely to step in and force a resolution, as has happened during past stoppages. 

“It’s like your body and the blood is not being delivered — that’s how bad it is,” Vakil said of the impact of a rail strike. “In fact, in the 1980s, Congress stepped in after four days because of the pain that was being felt. That’s how quickly it becomes a really bad situation.”

— With reporting by Irina Ivanova and the Associated Press.

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