Freight Rail Strike Could Impact Holiday Season

Dec 03, 2011 3:34 AM  By

If the railroad unions don’t reach an agreement and strike on Dec. 6, it would have a dramatic effect on the crucial portion of the holiday season.

Jonathan Gold, supply chain vice president for the National Retail Federation, says any kind of disruption in rail service could negatively impact retail supply chains.

“Even a single day of disruption could delay the delivery of merchandise destined for store shelves,” he says. “This is even more critical during the busy holiday shopping season. We urge the railroads and unions to stay at the table and get a deal done by Dec. 6. If not, they need to stay at the table until a deal is done without any network disruptions.”

NRF president/CEO Matt Shay told member of Congress that it’s “imperative that Congress recognize the severe economic harm threatened by the failure to reach agreement with the remaining rail unions and move quickly to prevent a rail strike that would prove devastating to both businesses and consumers.”

The nation’s major freight railroads have reached contract agreements with 10 of their 13 unions, and an 11th union representing maintenance workers has said it will continue talks at least until February. But there has been no agreement with unions representing dispatchers and locomotive engineers, and those two groups could go on strike on Dec. 6.

If the railroads and unions do not agree to the non-binding recommendations made by a Presidential Emergency Board by next week’s deadline, President Obama could send a bill to Congress imposing the settlement on both sides. Congress could also move such legislation on its own.

In a letter to President Obama, RILA President Sandy Kennedy said:

“A national railroad shutdown would force retailers to shift the delivery of their goods to trucks, increasing costs, time of delivery and congestion on our nations already crowded roadways. This means that the Christmas shopping season could be severely affected as products destined for stores sit idle at ports or in traffic. In fact, as the deadline approaches, the threat alone of such shutdown will force retailers to make changes to their supply chains, changes that could linger into 2012. According to some estimates, a nationwide railroad strike could cost the U.S. economy $2 billion per day.”