The American Bakers Association (ABA) is warning of potentially severe consequences for the nation’s supply chain should thousands of union rail workers go on strike next week following stalled labor negotiations.
“Even a temporary interruption would create a devastating ripple effect,” Lee Sanders, the ABA’s senior vice president of government relations and public affairs, said in a statement to The Epoch Times.
“Rail-dependent facilities would be unable to receive materials and ingredients, and millions of Americans a day would be unable to receive the baked goods they rely on to feed themselves, their families, and communities,” he added.
Sanders said the ABA is “very concerned” about a potential rail system stoppage and the pressure it would bring to the nation’s fragile supply chain. Between 15 and 20 percent of all bakery ingredients in the United States are products transported by rail.
“Reliable rail freight transportation is critical now, more than ever, as we continue to grapple with some of the most severely impactful events in our nation’s history,” Sanders said.
As of Sept. 13, two of the nation’s largest rail unions—the Brotherhood of Locomotive Engineers and Trainmen (BLET) and SMART Transportation Division—remained at an impasse with six major rail carriers over ratifying a new contract.
Embargoes Announced
The Association of American Railroads (AAR) announced that the six Class I freight railroads engaged in national bargaining would begin to take steps to secure materials considered hazardous and “security-sensitive” ahead of the Sept. 16 deadline.“Railroads are taking all measures necessary to handle sensitive cargo [under] federal regulations to ensure that no such cargo is left on an unattended or unsecured train in the event of a work stoppage due to an impasse in labor negotiations,” the AAR said in a statement.
Additionally, other freight customers may experience delayed or suspended service over the next week as the railroads “prepare for the possibility that current labor negotiations do not result in a resolution” and reduce operations for safety and security.
As a precaution, Union Pacific Railroad said it began securing hazardous and security-sensitive materials on Sept. 12.
“While these actions are necessary, they do not mean a work stoppage is certain. What we want, and continue to push for, is a prompt resolution that provides historic wage increases to employees and allows the railroads to restore service as soon as possible, preventing further disruption to the struggling supply chain,” UP said in a statement.
The Railway Labor Act requires a 30-day waiting period if both sides fail to reach a negotiated contract settlement.
That period expired on July 18, three days after President Joe Biden signed an executive order creating an emergency board to investigate stalled national labor negotiations. The ruling allowed labor unions and freight carriers more time to work out their differences over wages, hours, and working conditions.
No Acceptable Agreement
“This completely unnecessary attack on rail shippers by these highly profitable Class I railroads is no more than corporate extortion. Our unions remain at the bargaining table and have given the rail carriers a proposal we would be willing to submit to our members for ratification.”Still, the rail carriers “refuse to reach an acceptable agreement,” the statement said.
“It was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our unions, but they cannot legally lock out our members until the end of the cooling-off period.
“Instead, they are locking out their customers beginning Monday [Sept. 19] and further harming the supply chain to provoke congressional action.”
The BLET represents nearly 57,000 rail workers, while the SMART transportation division comprises 125,000 active and retired members of the former United Transportation Union.
In a September 2022 report, the AAR’s Policy and Economics Team found that lost output due to a nationwide rail shutdown could exceed $2 billion daily.
“Freight railroads are indispensable to our economy,” the report said. “That’s why a freight rail shutdown idling more than 7,000 long-distance Class I trains per day—in addition to short-line, passenger, and commuter trains—would be devastating.”
The report added that switching from rail freight carriers to truck trailers would be “costly and disruptive,” requiring 467,000 additional long-haul trucks daily to handle the freight volume.
The possible rail strike comes during a nationwide shortage of more than 85,000 truck drivers, a number expected to double by 2026.
“Currently, neither the trucks nor the truck drivers necessary to meet this demand are available. In addition to freight impacts, a freight rail shutdown would halt most passenger and commuter rail services,” the AAR report added.
