Retail trade groups are warning about the disastrous impact a U.S. rail worker strike could have on the economy and the industry.
The strike, which could occur as early as next week, became a possibility after one of the largest railroad unions last week rejected a proposed agreement with railroad management. Thus far, eight out of 12 unions have ratified the agreement. If management and all of the unions fail to meet at an agreement, a strike could commence as early as next week, with the unions that have already ratified agreements joining in at the picket line.
A strike would also threatening supply chain recovery across the country and could leave retailers without a crucial avenue for shipping and transporting their goods moving into the holiday season. In the absence of rail access, retailers would need to utilize shipping alternatives such as planes and trucks.
“It would be devastating for our economy at a time like this to see any stoppage in the shipment of goods by rail,” said president and CEO of the National Retail Federation Matthew Shay in a Tuesday call with media discussing sales results for Thanksgiving weekend. “We rely on [rail shipping]. It would cost our economy billions of dollars a day. It’s the worst possible time for this to happen.”
A strike could cost the U.S. economy $2 billion a day, the Association of American Railroads (AAR) estimated. AAR and other trade groups have recommended that Congress impose recommendations for resolution via the Presidential Emergency Board (PEB), which was created to help settle the dispute.
President Biden yesterday called on Congress to pass legislation to approve a tentative agreement between workers and railroad management, a move that was met with praise from industry trade groups. In a statement, the president said the shutdowns could result in 765,000 Americans) including rail workers) out of a job in the first two weeks of the strike.
The Footwear Distributors & Retailers of America (FDRA) has also urged Congress to help avoid a rail strike and is currently encouraging its members to email Congress to urge them to take action to prevent a strike.
“Shutting down freight rail right before the holiday season would be devastating for American families and businesses,” said FDRA’s VP of government affairs Thomas Crockett in a statement. “It would create uncertainty, drive up costs, and worsen inflation. Congress must be prepared to take action to ensure a railroad strike does not happen.”
