One of the biggest users of freight rail in the United States is the chemical manufacturing sector, which ships more than 33,000 carloads per week. If a labour agreement between rail companies and unions isn’t reached before a potential strike in December, the sector expects to suffer billions of dollars in economic damage.
According to a recent economic analysis by the American Chemistry Council, a weekly shipment of chemicals worth $2.8 billion would be affected by a rail strike, and a month-long strike would cause an overall economic hit of $160 billion, or one percentage point of GDP, to the economy.
Among other manufacturing specialties, the ACC represents businesses in the energy, pharmaceutical, and industrial sectors, including 3M, Dow, Dupont, Exxon Mobil, Chevron, BP, and Eli Lilly.
Chemicals are some of the most delicate goods that freight train companies move, and they are the first to be handled when there is a strike danger. Seven days ahead to the strike date, the freight firms would begin procuring crucial chemicals like chlorine for drinking water over routine cargo, according to strike preparation plans made public by the railroads back in September when a potential labour stoppage was averted. All chemical shipments are stopped moving 96 hours before a strike deadline.
In the week of September 10 when the railroads stopped accepting shipments because of the threat of a strike, there was a decrease of 1,975 carloads of chemical shipments, according to AAR data, according to Jeff Sloan, senior director of transportation policy at ACC.
If an embargo were to occur this month, “we would predict a comparable substantial fall in chemical supplies.”
The outcome of votes from some of the biggest train unions that have yet to accept the labour agreement suggested by President Biden’s Presidential Emergency Board will determine when rail strike preparations can begin.
On Monday, November 21, the results of the two biggest union elections will be announced by the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) and the Brotherhood of Locomotive Engineers and Trainmen (BLET), a Division of the Rail Conference of the International Brotherhood of Teamsters.
The proposed agreement would become official if both unions approved it, and on December 5, the railways would begin preparing for a strike. The Brotherhood of Railroad Signalmen (BRS) and the Brotherhood of Maintenance of Way Employees Division (BMWED) are both eligible to go on strike on that day. Their right of withdrawal expires on December 4. The International Brotherhood of Boilermakers announced Monday that it would continue to negotiate after rejecting the labour agreement.
The strike date would be December 9, the day after SMART-TD or BLET’s cooling-off period expires, if they reject the accord. In order to coincide with the revised strike date, BMWED has stated that it will prolong its own cooling-off period. BRS has not yet disclosed a similar extension of the cooling-off period.
The logistical planning issues are greatly exacerbated by these conflicting dates.
Sloan stated that “railroads will stop carrying chemicals that are necessary for daily life well in advance of a strike, including items that are important for the manufacture of safe drinking water and food.” “With a rail service embargo, many chemical facilities would be forced to close down in the first week.”
According to the AAR, the effects of a prospective strike would be seen almost immediately in practically every industry. Utilizing the power it has to impose a settlement under the Railway Labor Act, it has requested Congress to get involved. Its economic research predicts a four-point increase in the Producer Price Index, a crucial inflation index that showed indications of slowing on Tuesday.
According to Chris Jahn, president of the ACC, “American consumers and manufacturers are still grappling with inflation and don’t need to be hit with a new crisis.” Every member of Congress should be very interested in preventing this economic catastrophe, so we urge lawmakers to move quickly on legislation that will put into effect the terms that railroads and labour leaders agreed to in September.