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Tuesday, February 7, 2023

The US Government Prepares for a Train Shutdown

The potential shutdown could halt over 30% of cargo shipments into the United States

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UNITED STATES: Tuesday saw US President Joe Biden’s administration creating emergency plans to guarantee the delivery of essential goods if the American rail system was to shut down.

The administration also pressured railroads and unions to agree to prevent a work stoppage affecting freight and passenger service.

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The potential shutdown, which could occur as soon as this Friday, could halt over 30% of cargo shipments into the United States. Fuel inflation, obstructing the supply of food and gasoline may cost the American economy approximately $2 billion per day, and create transportation problems.

To achieve tentative agreements with three hold-out unions representing roughly 60,000 workers, railroads including Union Pacific (UNP.N), Berkshire Hathaway’s (BRKa.N) BNSF, CSX (CSX.O), and Norfolk Southern (NSC.N) have until one minute after midnight on Friday.

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As the Biden administration continues “sustained engagement and hands-on efforts to encourage the parties to come to a mutually beneficial agreement,” a Labor Department spokesperson announced late Tuesday that Secretary Marty Walsh “will host the rail companies and the unions in Washington” at the department on Wednesday morning.

If agreements cannot be made, there may be lockouts or strikes by employers. However, the railroads and unions might potentially agree to continue negotiating, or the Democratic-led U.S. Congress could step in and extend negotiations or determine the parameters of a resolution.

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The Biden administration’s campaign comes as groups representing the food, energy, automotive, and retail industries beg Congress to take action, warning that a rail closure could endanger everything from global grain supplies to shipments of items essential to the Christmas shopping season.

Karine Jean-Pierre, a press secretary for the White House, said the administration is considering using emergency authority and requesting trucks and air shippers to help if rail service is interrupted. The administration, according to Jean-Pierre, holds daily interagency meetings to determine which supply chains and commodities are most at risk.

Railroads are essential for transporting coal, crude oil, ethanol, and other goods in the U.S. energy sector.

Additional regulations that certain railroads intend to enact may impact food suppliers and online merchants who employ intermodal services, which link ships, trains, and trucks.

The Western US-focused BNSF announced that it would stop taking chilled intermodal traffic. The eastern U.S. carrier Norfolk Southern said that it would stop taking all intermodal shipments.

Amtrak, a passenger train operating in the United States that uses lines maintained by freight railroads, is experiencing increasing disruptions. After starting to cancel trains on four long-distance routes on Tuesday, Amtrak announced that it would cancel trains on seven more long-distance routes on Wednesday.

Also Read: Biden Executive Order to Fund the Biomanufacturing Sector

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