Could possible US railroad strike fuel more inflation?
Energy and gas supplies will be disruptedAnother major shock to the energy industry caused by a railroad strike would increase already high gas prices, which have only just started to come down.
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A railroad strike would likely force other transportation sectors such as trucks and barges to pick up the slack, but that could overburden them. Trucks already transport close to 70 percent of all grain, according to the U.S. Department of Agriculture.
It wouldn't take long for the effects of a rail strike to trickle through the economy. Many businesses only have a few days' worth of raw materials and space for finished goods. Makers of food, fuel, cars and chemicals would all feel the squeeze, as would their customers.
The nation's supply of food could take a hit if railroad workers go on strike, driving up prices at the grocery store and limiting U.S. grain exports to countries facing famine.
“It would be pretty impactful for the supply chain,” she said. “The backup into ports could reignite acute port congestion that we've seen. The parcel market, like UPS [which relies in part on the rails], you'll have that impacted, as well. There would be a lot of pressure on the truck market.
Supply SqueezesIf railroad workers went on strike, drayage freight truckers would lack the necessary equipment to handle the supply capacity of a freight train. With less space to transport goods via trucks, it would take longer to move the same amount of product.
Widespread economic impactAmong the problems could be: Gasoline: Without freight railroads, oil refineries would have trouble producing their current volumes of gasoline, which could send gas prices higher, ending a string of three months of falling prices at the pump.
Amtrak is preemptively suspending some service because its track will be affected if freight rail workers go on strike. “Amtrak operates almost all of our 21,000 route miles outside the Northeast Corridor (NEC) on track owned, maintained, and dispatched by freight railroads,” said Marc Magliari, an Amtrak spokesman.
The rail unions are headed toward a strike over pay and ongoing grievances from members that the working conditions are grueling, and not conducive to a life off the job.