Chemical shippers warn rail strike could hasten recession

If a strike continues for another month, the two months combined could result in the PPI  increasing by 12% and cause the GDP to contract by 2%.

“A rail strike could shove the economy out of recovery mode and into a recession,” ACC Chief Economist Martha Moore said in a news release. “A prolonged strike would have an exponential effect for each additional month and drag the country into a potential recession much faster.”

A rail strike could curtail production at ACC member facilities because they typically don’t have more than four to five days’ worth of empty cars or raw materials on hand, according to the report. If facilities aren’t able to receive the supplies they need after roughly a week, they could be forced to shut down. 

ACC and other shippers have urged Congress to prevent a rail strike, sending a letter recently to the majority and minority leaders in the U.S. Senate and House of Representatives. 

Should a strike appear imminent, Congress should pass legislation that would enact the labor contract terms that the unions and the railroads agreed to in September, ACC said.

Shippers’ groups are concerned that a strike could occur should members of the two largest rail unions — the ones representing locomotive engineers and train conductors — decide against ratifying their labor agreements with the railroads. The results of their votes on whether to approve a new deal will be announced Monday.

Three other rail unions have already voted against ratifying their labor agreements and headed back to the bargaining table. 

Sick leave policies could be one of the sticking points for those unions, although the railroads have indicated publicly a reluctance to budge, opting instead for that discussion to occur outside of contract negotiations, per recommendations by the U.S. president-appointed board that convened over the summer to help resolve the multiyear negotiations impasse.

If members of the locomotive engineers and train conductors’ unions vote against ratification, members could opt to engage in a strike but only after a cooling-off period, per federal law. That stretch for some of the five remaining unions ends Dec. 4, although that timetable could be extended to Dec. 9 if they align their ending dates for the periods.

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Related links:

• Boilermakers reject labor agreement with US freight railroads

• Rail union pushes back date for potential strike

• Agricultural shippers press Congress to act if rail strike is imminent