Railroad strike: Industries brace for freight rail strike impacts

A strike could go ahead if the railroads and unions cannot settle their differences before a strike deadline early Friday.

WASHINGTON — Auto buyers may not get the vehicle they want on time, commuter routes could disrupt service, and shipments from oil to cattle feed could be muddled.

These are just a few of the far-reaching effects that a strike by US rail workers would have on the nation’s industries and economy. A strike could go ahead if the railroads and unions cannot settle their differences before a strike deadline early Friday.

This is how some industries are assessing the potential impact and preparing for the possible work stoppage.


Almost all new vehicles that travel more than a few hundred miles from the factory to their destination are shipped by rail because it’s more efficient, said Michael Robinet, executive director of S&P Global Mobility. So it’s almost a certainty that new vehicles coming into the US from Mexico or other countries will be delayed, he said.

“It’s not like there’s extra truck capacity to accommodate all the vehicles that the railroads can’t carry,” Robinet said.

Car manufacturers could also be hampered in building vehicles because some larger parts and raw materials are transported by rail. But Robinet said automakers will go to great lengths to get the parts to keep their factories running as much as possible.

Mike Austin, senior mobility analyst at Guidehouse Research, said the strike could make new vehicles even more scarce and push prices past current record levels. That could fuel inflation “as other goods don’t go through the rails.”

Stellantis CEO Carlos Tavares said Wednesday at the Detroit Auto Show that his company will apologize to customers because their orders may not arrive on time.


The Metra transit service, which operates in the Chicago area, said Wednesday it would suspend operations on four of its 11 lines Friday if there is a work stoppage. Some disruptions on those lines would begin after Thursday evening rush hour. In Minnesota, operators of a subway line that carries workers along a densely populated corridor from Minneapolis to northwestern suburbs and cities warned that operations could shut down as early as Friday.

In the Puget Sound area of ​​Washington state, any strike would halt rail service until workers return to work, said David Jackson, a spokesman for regional transit company Sound Transit. Some Caltrain riders in the San Francisco Bay Area could be hit by a rail strike, officials said.

The Maryland Transit Administration warned this week that a strike would mean the immediate suspension of operations on two of its three MARC commuter rail lines.

Meanwhile, Amtrak announced that all long-distance trains will be canceled starting Thursday to avoid potential passenger disruptions along the way.


A strike could have a major impact on the energy industry, hurting consumers who would likely end up paying more for petrol, electricity and natural gas. Refineries may have to shut down production if they can’t get the supplies they need or if they don’t have access to rail to ship gasoline.

Nobody wants to take the risk of leaving flammable chemicals on the tracks during a strike. That’s why railroads began restricting the shipment of hazardous materials on Monday to protect this dangerous cargo.

According to the AFPM, around 300,000 barrels of crude oil are transported by rail every day, which could supply about two medium-sized refineries. And about 5 million barrels of propane, equivalent to a third of U.S. consumption, are shipped by rail every month, the group said.

According to S&P Global Commodity Insights, about 70% of ethanol produced in the US is shipped by rail, and ethanol accounts for about a tenth of US gasoline volume. Almost 75% of the coal shipped to electric utilities in the first half of 2022 was transported by rail, the group said.


According to the National Grain and Feed Association, ranchers could see problems almost immediately if feed shipments were abruptly halted.

Meat and poultry companies realized that the transport of animal feed relies on rail and called for a quick solution to the rail dispute. Each week, the nation’s chicken industry receives about 27 million bushels of corn and 11 million bushels of soybean meal to feed chickens, said Tom Super, senior vice president of the National Chicken Council.


Experts say retailers have been shipping goods earlier in the season in recent months to guard against possible disruption. But that buffer will only marginally minimize the impact of a railroad strike brewing during the critical holiday shipping season, said Jesse Dankert, vice president for supply chain at the Retail Industry Leaders Association, a retail group that counts more than 200 retailers like Best Buy as its members . She noted that retailers are already feeling the effects of the uncertainty as some carriers limit their services.

Dankert noted that retailers noticing a slowdown in shipments are now making contingency plans, such as:

However, she found that there were not enough trucks and drivers to meet her needs. That shortage will only drive up costs and worsen inflation, she said.

“As we’ve seen over the past two and a half years, if there’s a breakdown anywhere along the supply chain, a link breaks down, you see that ripple effect pretty quickly, and that impact spreads out from there,” Dankert said.

https://www.king5.com/article/news/nation-world/railroad-strike-impact/507-3e8d4a6b-449c-44ea-9790-ad4804f8b68f Railroad strike: Industries brace for freight rail strike impacts

Alley Einstein

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