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National rail strike could cripple supply chain
Grassley says Congress should act if Biden can’t
Little sign of progress has been seen ahead of a potential massive walkout beginning this Friday, after freight railroads and labor unions that represent more than 90,000 workers have held talks to try to avoid a strike that could cost the U.S. economy more than $2 billion a day.
A national rail strike, effective 12:01 a.m. Eastern Time Friday, would threaten shipments of grains, fertilizer and energy when global food prices are elevated and inflation ripples through economies.
The threat comes as the world increasingly turns to the United States for food supplies, with Russia’s war in Ukraine roiling commodity markets and disrupting grain shipments from the Black Sea, one of the world’s breadbaskets.
A strike could affect all major U.S. railroads, including BNSF, Union Pacific and CSX Transportation.
While 10 of 12 railroad workers’ unions have struck new labor deals, there are two holdouts — the Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal Air, Rail and Transportation Workers.
President Joe Biden and cabinet officials were in touch with freight-rail companies and unions Monday in an effort to avert a strike, according to a White House official.
Iowa’s U.S. Sen. Chuck Grassley said in a tweet Biden needs to step in and tell those holding out to keep negotiating or take the deal, and “If he can’t, Congress must.”
A strike in July was pushed off after Biden called for a 60-day cooling-off period.
The strike’s effects would be widespread, nationally and in the Corridor where Cargill, Ingredion, Archer Daniels Midland, PepsiCo’s Quaker Oats and General Mills all count on rail service to transport materials:
- “Processing and biofuels plants may have to scale back production due to an inability to both move in commodities for processing and move out finished products for consumption,” the National Grain and Feed Association said in a statement.
- Fertilizer shippers have been preparing for the worst.
“Rail networks are complicated, and carriers must make preparations ahead of a potential stoppage to keep certain types of cargo safe and secure,” Fertilizer Institute CEO Corey Rosenbusch said in a Saturday statement.
“Fertilizer falls into that category and is being taken off the rails. That is bad news for farmers and food security.”
The looming stoppage comes as U.S. growers are about to apply fall fertilizer, said Jeff Blair, CEO of GreenPoint Ag, a Memphis, Tenn.-based agriculture supply company. Rail is a key part of the nation’s agriculture supply chain and moving fertilizer to farmers and crops, he said.
“With the global food shortage due to Russia’s invasion of Ukraine and high inflation, any strike would be brutal for farmers, the industry and the public,” Blair said.
- The possible disruption could hit just as American farmers harvest key crops, including a record soybean bounty.
“The potential of service slowdowns or stoppages ahead of the harvest season is incredibly concerning,” American Soybean Association spokeswoman Wendy Brannen said.
- The National Grain and Feed Association, which represents some of the world’s largest agricultural commodity traders, said in a Monday letter that, “A shutdown would quickly cause additional problems and force producers to make difficult decisions regarding the viability of their animals.”
- The U.S. coal industry also faces significant effects as the vast majority of the power-plant fuel is transported by train.
“Coal would stop,” said Ernie Thrasher, CEO of Xcoal Energy and Resources, the biggest U.S. exporter.
“No coal is going to move until these guys go back to work.”
Iowa DOT
Amanda Martin, rail director for the Iowa Department of Transportation, said Amtrak planned to pre-emptively suspend passenger rail service through Iowa starting Tuesday.
Amtrak operates two long-distance routes that run through southern Iowa from Chicago to Los Angeles and Chicago to the San Francisco Bar area, with stops in Omaha, Creston, Osceola, Ottumwa, Mount Pleasant, Burlington and Fort Madison.
In addition, Martin said BNSF and Union Pacific are halting the shipment of hazardous materials across the country, such as chemicals used in fertilizer, to avoid such materials being unattended or unsecured in case of a work stoppage.
The Iowa DOT also has notified its construction project vendors and partners, including contractors, cities, counties and other entities, “that if a strike occurs and rail is involved in the efforts they have going on, that there might be delays or issues because of lack of flaggers and other rail personnel assisting on those projects,” Martin said.
She noted the DOT has not received a “clear indication” from the railroads as to whether a strike will occur.
“I think everybody is optimistic that things will get negotiated,” Martin said.
Gazette reporter Tom Barton contributed to this article.
A Union Pacific freight train travels through a rail yard in St. Louis. (Bloomberg)
Cargill in Cedar Rapids is among the companies that use rail service. (Michael Chevy Castranova/The Gazette)
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