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Rail Strike Reverberations: Will Congress Hang the Economy Out to Dry?

Imagine a scenario where Congress had the authority to secure and protect the supply chains that keep Americans clothed and fed and the economy running but chose not to use it.

As Congress returns from the Thanksgiving holiday, a burden should weigh heavily on their shoulders. Will they take action to protect hardworking American families and American economy?

A rail strike is imminent and could start as early as Dec. 9. To ensure key commodities, like hazardous chemicals and fresh produce, are not left stranded on rail cars, railroads will begin strike preparations to stop carrying certain cargo as soon as this week.

Why are we at this railroad crossing? One of the two biggest rail unions, the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD), rejected a tentative rail labor contract. The current contract has already been renegotiated once, after rail workers threatened to strike earlier this fall.

To date, eight of 12 rail unions have ratified the contract and four unions have rejected the contract. Other unions have already announced they will not cross picket lines, which means all 115,000 rail workers could be on strike.

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About 30 percent of clothes, shoes, and accessories move by rail. Those goods include children’s apparel, backpacks, winter coats and boots, work shoes, uniforms—including those for essential workers, and many more everyday essentials.

The administration’s punitive Section 301 tariffs and Congress’ failure to renew the long-expired Generalized System of Preferences (GSP) trade preference program and the Miscellaneous Tariff Bill (MTB) have already contributed to record inflation. A rail strike will leave clothes and shoes stranded on stopped rail cars and lead to skyrocketing logistics costs as our industry competes with other impacted industries and farmers to secure a dwindling supply of trucks, which in turn will leave store shelves empty and drive prices up further as we enter the critical holiday shopping season.

And we are not alone. The American Chemistry Council found that a rail strike could lead to the loss of 700,000 American jobs and a four percent increase in inflation, which would likely tip the U.S. economy into a recession. The impact of a rail strike is very real. It will be felt by every American at the grocery store, in their stockings, and at the gas pump. It will be felt by every American farmer and manufacturer that relies on rail to move their materials and products.

Rail labor talks are at an impasse. The only entity that has the power, the authority, to stop a rail strike is Congress. Congress alone has the power to extend the current deadline and force the railroads and rail workers back to the negotiating table. Congress alone has the power to impose a new rail labor contract on all parties.

Nate Herman

Our supply chains remain too fragile for this kind of brinksmanship and it is imperative that all logistics stakeholders continue to work together to support modern and efficient systems, and ensure there are safe and responsible workplaces that power them.

With deliveries impacted as soon as this week, Congress must step up immediately and take action. Even a couple days of strike preparation, or even one day of a strike, would create delays and snarls that could take weeks to fix.

Inaction is simply pinning American consumers—and the U.S. economy—to the clothesline.

Nate Herman leads the industry’s policy work as senior vice president, policy at the American Apparel & Footwear Association (AAFA).