With U.S. railroad shutdown threatening, industry counts the cost

LOS ANGELES (Reuters) – A railroad strike or lockout may price the U.S. financial system $2 billion per day in output, threaten provides of meals and gas, and stoke already red-hot inflation, based on an trade report launched on Thursday.

President Joe Biden this summer time appointed a presidential emergency board (PEB) to interrupt a labor negotiation deadlock between main U.S. railroads and the unions representing 115,000 of their employees.

These teams have till simply after midnight on Sept. 16 to achieve a deal based mostly on the board’s suggestions. Failure to take action will open the door to labor or management-led work stoppages – in addition to Congressional intervention.

The financial impression report issued by the Affiliation of American Railroads (AAR) warned that pulling the brakes at Union Pacific, Berkshire Hathaway’s BNSF, CSX and different freight railroads may disrupt shipments of wheat and different grains through the important harvest season, upend coal deliveries to energy vegetation, exacerbate car and auto half shortages, and strand e-commerce packages dealt with by United Parcel Service and different shippers.

Diverting shipments to over-the-road transportation would require an extra 467,000 long-haul vans per day, exceeding availability, AAR mentioned.

The AAR report landed a day after the Nationwide Mediation Board hosted a gathering with railroads, unions, and U.S. Labor Secretary Marty Walsh with the goal of averting work stoppages that would pile additional prices on customers simply weeks earlier than midterm Congressional elections that would change the fortunes of Biden’s Democratic get together.

Unions and freight railroads have thus far reached tentative agreements overlaying 21,000 employees represented by 5 of the 12 unions concerned within the talks. These staff may refuse to cross picket strains if the 2 sides do not forge offers to cowl all the employees.

“A nationwide rail work stoppage would end in an pointless $2 billion every day financial hit,” mentioned AAR President and CEO Ian Jefferies. “Ought to negotiations fail and end in a piece stoppage, Congress should act to implement the PEB suggestions.”

(Reporting by Lisa Baertlein in Los Angeles; Modifying by David Gregorio)