With fear looming that a shutdown of the U.S. rail system could occur on December 9, after stakeholders failed to reach consensus in recent weeks, the House voted on November 29 to force a tentative agreement and thwart the proposed rail strike and, on December 1, the Senate voted in favor as well.
At issue was the failure of railroad unions and management, after months of negotiating, to come to a voluntary labor agreement. President Biden has said he’s reluctant to override the vote against the contract by some unions, but that a rail shutdown would “devastate” the economy. In fact, industry experts predict that a rail strike could cost the U.S. economy $2 billion per day.
Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association, tells Food Quality & Safety that a rail strike would be crippling for the consumer packaged goods (CPG) industry and consumers. “A halt in rail service would stifle the manufacturing of millions of essential food, beverage, home and personal care products Americans rely on every day, eventually leading to empty store shelves,” he says. “Freight rail constitutes about 30% of total CPG transportation, and these operations can’t easily transition to other transportation modes, nor is there available capacity to handle huge swings in demand.”
Therefore, failure to implement a solution before a strike would have resulted in major disruption to the already burdened supply chain, and the whiplash would ultimately fall on consumers who would be unable to access the essential items they need. “We’re glad Congress met our call to step in and put the rail strike to rest before it impeded consumer access to the essential products they rely on,” Madrecki says. “While a full-blown crisis was narrowly avoided, the severity of its potential impact demonstrates why Consumer Brands supports longer-term legislative solutions to bolster our supply chain.”
Earlier this week, more than 400 companies that represent American industries signed a letter urging Congress to intervene before the strike occurred, which helped lead to the House and Senate decisions.
Julie Anna Potts, president and CEO of the North American Meat Institute, was among those who voiced their concern in the letter. “A rail strike would cause severe supply chain disruptions for the meat and poultry industry, raising the cost of food for consumers and further damaging a struggling U.S. economy,” she says.
Jennifer Hatcher, chief public policy officer for the Food Industry Association, adds that, as the U.S. heads into the busiest shopping season of the year, she’s encouraged that Congress has acted to keep railroads operational.
President Biden is expected to quickly sign the legislation.