Trucking group warns of ‘dire consequences’ for supply chain if massive railroad strike happens next week

On Friday, the American Trucking Associations (ATA) told lawmakers that a looming railroad workers strike could have a devastating impact on the U.S. trucking industry and the supply chain at large.

As unions representing more than 90,000 railroad workers prepare to go on strike on September 16 if they do not receive new labor contracts, the ATA is sounding the alarm that the already strained U.S. supply chain is at risk if trucking is asked to pick up the slack of the railroad industry.

In a September 9 letter to Congressional leaders, ATA President Chris Spear asks that they be prepared to take swift action to “avoid a debilitating and unnecessary labor disruption that could cost the country billions each day.”

Spear writes:

“While trucking and rail companies compete for ground freight, trucking is also the largest customer of the rail industry, and both industries rely on one another to keep our supply chains healthy and efficient. We deliver the last mile of virtually every product that rail transports … Idling all 7,000 long distance daily freight trains in the U.S. would require more than 460,000 additional long-haul trucks every day, which is not possible based on equipment availability and an existing shortage of 80,000 drivers. As such, any rail service disruption will create havoc in the supply chain and fuel inflationary pressures across the board.“

Spear continues:

“Additional insecurity placed on the still fragile U.S. supply chain – as we recover from COVID and other supply chain stressors and move towards the holiday season — will harm the economy at large and individual Americans. It is therefore vital that agreements be finalized for all contracts before the end of the cooling off period.“

Congress could act to prevent a labor stoppage by either implementing another cooling off period (President Biden prevented a railroad strike about two months ago by implementing the cooling off period that is expiring on September 16) or by intervening to implement a contract.

The ATA pointed out that another cooling off period could result in a railroad strike in October or November, which the group said could be “arguably worse than one next week” due to pressures placed on the supply chain by the holidays.

A report released earlier this month by the Association of American Railroads (AAR) predicted that a railroad shutdown would cost the U.S. $2 billion per day in lost economic output. The report also suggested that a railroad shutdown would result in retail product shortages, lost jobs, widespread plant shutdowns, higher costs for consumers and businesses, and “more trucks on the highway and more CO2 in the air.”