Railroad Strike May Cause Significant Supply Chain Disruption

EDITED 10/11/22: Rail union votes down Biden-backed railroad labor deal. National strike is back on the table for consideration.

EDITED 9/15/22 8:16 AM: National Railroad Strike Averted! 

A pending railroad strike that was initially blocked by executive action from President Biden back in July, allowing for a sixty-day delay, may begin on Friday, 9/16/22.

The strike, led by the two most essential unions in the railroad industry representing engineers and conductors, has been negotiating on behalf of over 100,000 railroad employees whose responsibilities essentially keep the railroads across the nation running.

As of today, it does not appear that the union's negotiations are getting the response they want. This could lead to a national strike starting tomorrow morning.

This could cause a rather precarious situation for a supply chain that has already been heavily beaten up by the COVID pandemic, trucker shortages and protests, and continued problems with container ships that sit unopened in ports around the globe to this day.

At the moment, there is no guarantee that the strike will move forward but based on current tensions felt by these railroad employees who say that staffing shortages and being on call at all times say that their work lives have become intolerable.

The main question everyone is asking themselves at this point is, should the railroad strike occur, what will the repercussions be for an already burdened supply chain?

And, in what ways can these events be dealt with to prevent further decline in the availability of various items such as automobiles, consumer goods, and other products threatened by the strike?

While only time will tell, in the article below, we will dive deeper into the strike and provide information on what could happen if they proceed and what is being done by elected officials to negate potential problems.

What Is The 2022 Railroad Strike?

With countless employees of the American railroad system lamenting a continually decreasing quality of life due to excessive work hours resulting in many having little if any time to spend with family and friends, a potential strike by said employees is on the horizon.

Tensions in the American railroad industry have been rising for months, with many conductors and engineers expressing these feelings of hopelessness to what many of them feel are deaf ears.

An initial strike that was to take place back in July was blocked by President Biden through special federal laws pertaining to the railway system in an effort to derail the event.

This provided the Biden Administration and other political powers a grace period of sixty days to come up with a solution.

However, that grace period is ending on Friday of this week, and as of now, the negotiations between the unions for the conductors and engineers and the powers that be have produced no indication of a resolution.

As such, the strike's probability of moving forward starting early Friday morning is exceptionally high.

Supply Chain Disruptions In The Wake Of A Strike

For many American Industries and businesses, this comes as an ill portent. With the supply chain only recently showing some signs of recovery from the devastating effects of the COVID pandemic and other global supply chain disruptions such as the war in Ukraine, the national truck shortage and protests, and the ever given containership debacle, this is not welcomed news.

And while President Biden is working with various partners to find workarounds to keep some sense of normality in the national supply chain, many question the validity of these actions.

One way in which the Biden administration is working to ease any further supply chain problems is by shifting as much shipping and logistics to the trucking industry as possible.

However, as the American Trucking Association has pointed out, there is no alternative to railroads for many types of materials and products.

And for the goods that could be diverted from trains to trucks, the nation would need an additional 460,000 long-haul trucks.

At a time when the country still suffers from a lack of 80,000 truck drivers, this looks unrealistic at best. With that being said, the Biden administration is looking to work with shipping companies and air freight organizations to limit further damage to the national supply chain.

As to whether or not these efforts are in vain, only the coming weeks will show that to be true or not.

What Can We Expect If The Railroad Strike Occurs?

If the strike moves forward, there is no telling how long it will go on before a resolution is found and these rail workers go back to their jobs, resuming business as usual.

In light of this, many businesses and consumers alike are wondering what will happen should the strike move forward.

While it is impossible to say precisely what the repercussions of the railroad strike will be, the initial effects of the event would include the following items.

• Fuel: With railroads shut down; oil refineries will struggle to produce the current volumes of gas required for current pricing, which will likely launch gas prices higher once again.
  
• Food: The agricultural and related food industries would take a noticeable hit preventing newly harvested crops from moving to food manufacturers, further disrupting supply chains for fertilizer and other items needed for new plantings.
  
• Consumer Products: With the holidays right around the corner, many are concerned that holiday consumer goods such as electronics, video game systems, and other items commonly bought for holiday festivities will be in short supply. And this is a genuine possibility.
  
• Automobiles: Automobile prices which have already skyrocketed this year due to previous supply chain disruptions, would continue their dramatic accent as the availability of cars and trucks would continue to decline, as would the parts and related items needed to keep them running.
  
  

What Is The Solution To Preventing Or Ending The Strike?

While various politicians and political powers have attempted to persuade rail workers with pay increases and annual bonuses, most say this has nothing to do with pay.

Many of these people are happy with their wages. According to the workers themselves, the problem is the continually declining quality of work life, which has led countless rail workers to quit their jobs.

This has resulted in the work life of the workers who have chosen to stay becoming an absolute nightmare. At the end of the day, what these people are asking for is a better quality of life at work.

With that being said, the significant shortage of rail workers is making it hard for these demands to be met. Still, the unions and those they are negotiating with are working to find a middle ground to prevent or shorten the strike.

We are closely monitoring this situation and will provide updates to this article or new articles as more information becomes available.