Just when you thought things couldn't get worse for the economy, the railroads look like they are about to shut down.
Amtrak has suspended long-distance passenger travel and now US railways have put a halt to grain shipments as a rail strike appears imminent.
Some U.S. railroads will start halting crop shipments on Thursday, a day ahead of a potential work stoppage, an agricultural association and sources at two grain cooperatives said on Tuesday, threatening exports and feed deliveries for livestock.
With farmers starting to harvest autumn crops that are shipped to meat and biofuels producers, the shipping disruptions could add to already high inflation. Farmers also plan to add fertilizer to fields after the harvest, and shipments of fertilizer are being delayed.
Max Fisher, chief economist at the National Grain and Feed Association, which represents most U.S. grain handlers, said rail customers reported at least one railway would stop taking grain shipments on Thursday morning.
Yeah, this is shaping up to be another supply chain disaster.
The potential rail shutdown looms just six weeks before most Midwest farmers would begin applying fertilizer, said Josh Linville, fertilizer director at StoneX Group. About 40% of the U.S. fertilizer supply is on a rail car at some point before arriving on a farm, he said.
40% of the necessary fertilizer for crops may not be able to get from point A to point B.
The work stoppage would be keenly felt in states like North Dakota, South Dakota, Minnesota and Nebraska, from which grain is hauled via rail to ports in the Pacific Northwest for export, said Thomas Lahey, domestic freight manager at grain merchandiser Columbia Grain International. Grain elevators in the upper Midwest move soybeans to the PNW mostly via BNSF Railway, Canadian Pacific Railway and Union Pacific, he said...
"Any disruption of service could negatively impact the welfare of the birds, and ultimately impact production at a time when Americans are already dealing with record food inflation," council spokesman Tom Super said.
In North Carolina, a pork and poultry producer, local grain growers do not produce enough corn to feed all the farm animals, said Bob Ford, executive director of the North Carolina Poultry Federation.
"We'd be in trouble if they went on strike for very long," Ford said. "We'd run out of corn."
We may be heading into a real disaster if the rail workers cannot reach an agreement.
From CNN:
The labor dispute that could lead to the first national railroad strike in 30 years could begin as soon as this Friday. About 60,000 union members who work for the railroad are set to go on strike, including the engineers and conductors who make up the two-person crews on each train. Even though 45,000 other union members belong to unions that have reached tentative deals with the railroads, a strike by engineers and conductors would bring the freight rail system, which carries nearly 30% of the nation's freight, to a grinding halt.
Of course, this could all be avoided, if the Democrats, which control both houses of congress, would step in and prevent the strike.
From National Review:
Congress can step in and prevent a strike. Senator Roger Wicker (R., Miss.), the ranking member of the Commerce, Science, and Transportation Committee, has been calling for the adoption of the PEB's recommendations. Senator Richard Burr (R., N.C.) has introduced a joint resolution that would adopt the recommendations of the PEB as binding and avert a strike. All Congress has to do is pass it.
Democrats control both houses of Congress and the White House. An eleventh-hour deal is still possible, and parties could elect to extend the cooling-off period again, but if unions and carriers are unable to make a deal, and Congress doesn't step in to prevent a strike, the economic consequences that follow will be on the Democrats and their union allies.
Together, the Democrats and Union are helping to ensure that the economy completely shuts down because of a labor issue.
This could all be avoided.
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