With an impending strike on September 16, the Association of American Railroads confirmed that the 12 labor unions of the nation’s Class I railroads have failed to agree on a new contract and are willing to walk off the job.
“Railroads are taking all measures necessary to handle sensitive cargo in accordance with 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.
“Additionally, other freight customers may start to experience delayed or suspended service over the course of next week, as the railroads prepare for the possibility that current labor negotiations do not result in a resolution and are required to safely and securely reduce operations.”
A rail strike would result in port disruption due to the number of containers moved off terminal on trains – especially in the ports of Los Angeles and Long Beach, New York and New Jersey, Savannah, Seattle-Tacoma, and Virginia.
Additionally, intermodal marketing companies would not be able to book capacity for all their loads, plus the strike could disrupt the trucking market and increase spot market rates upward as shippers look to move their loads across the nation.
“There is a possibility that the railroads and labor unions will reach their agreements and a strike will be avoided,” said NCBFAA Logistics Subcommittee Chair Merit Tremper. “Realizing the severity that this strike would have on the nation’s economy, President Biden may announce steps to avoid a rail shutdown, like he did in July.”
We will continue to monitor this fluid situation and keep you advised. In the meantime shippers should be prepared for some disruption and consider contingency plans.