Christmas Isn't Cancelled But Can Congress Avoid Rail Strike?
At this time of year, if anyone is thinking about trains, they’re usually watching The Polar Express. Unfortunately, as the holidays loom, talks of a railroad strike drown out any classic holiday movies.
The good news? Christmas isn’t canceled. Most holiday items have already reached their destinations. The bad news? This strike could devastate the economy and cause food, gasoline, and automobile shortages across the country. We’ll take a look at why there is a potential strike, what happens if the railroads shut down, and whether there’s a potential to avert the strike.
Why are the railroad workers threatening to strike?
In September, the White House brokered a tentative agreement between rail companies and unions which included a 24% wage increase with improved health benefits. At the time, labor and management negotiators approved the deal. Now, the unions are back at the bargaining table to discuss sick leave, threatening to strike on December 9 if their demands aren’t met.
What happens if the railroads shut down?
The Association of American Railroads predicts that a shutdown will cost the economy $2 billion daily. In comparison, an estimate from Anderson Economic Group puts that number closer to $1 billion weekly. The bottom line— a strike won’t go unnoticed.
On November 28, President Joe Biden pleaded with Congress, “Let me be clear: a rail shutdown would devastate our economy. Without freight rail, many U.S. industries would shut down.” His economic advisors predict that:
- Up to 765,000 Americans could lose their jobs in the first two weeks of a shutdown
- Communities could lose access to clean drinking water without access to the chemicals needed
- Farmers and ranchers will not receive the food necessary to feed their livestock
If a strike shuts down the railroads in just over a week, the results could be catastrophic for a country already experiencing high inflation levels.
Can we avoid a shutdown?
Despite being a “proud pro-labor President,” Biden calls on Congress to “use its powers to adopt this deal.” Congress can avoid a shutdown thanks to the Railway Labor Act, enacted in 1926, which governs railroad and airline labor relations. The federal law allows Congress to adopt the agreement and avoid a shutdown.
BMWED, a rail union, says that forcing the adoption of the agreement without sick leave will “worsen supply chain issues and further sicken, infuriate, and disenfranchise railroad workers as they continue shouldering the burdens of the railroads’ mismanagement.”
How will this affect your parcel shipments?
If the strike goes forward, you may experience delays in your shipments. According to PBS, FedEx and UPS use railways to move packages, with each rail car carrying up to 2,000 packages— all of which will need to be moved by alternate methods.
Now is a great time to sign up for ShipRx’s parcel audit service. We track over 40 factors on every shipment, and if the carriers don’t deliver your parcels as guaranteed, we’ll get you the refunds you deserve. It’s free to get started, so get in touch today!
UPS reports a 5th consecutive quarterly decline
It’s no secret that the parcel industry has experienced some major shakeups over the past few years. From scrambling to meet a COVID-era spike in e-commerce to dealing with reduced demand due today, the carriers haven’t had it easy.
Amazon Surpasses UPS in Parcel Volume
The company that began as an online bookseller in Jeff Bezos’ Bellevue, Washington home is now one of the leading parcel carriers globally. For the first time ever, in 2023, Amazon Logistics surpassed UPS in parcel volume to secure 
The End of Free Shipping?
Last week, we discussed UPS and FedEx’s new surcharges in 82 urban zip codes. Now, some are saying these surcharges, ranging from $3.95 to $5.85, might be the final straw for free shipping.
Save On Your Parcel Costs Today
Get a full-scale analysis of your business and ShipRX exclusive recommended solutions to increase your profits.
