Technology companies are starting to reroute semiconductor chips from the rail system to trucks in the latest indication that fears of a rail strike are growing.
Workers at several unions have voted to reject the agreement reached between labor leaders and the railroads. If all the involved unions can’t get their members to agree to a contract by Dec. 9, a cooling-off period ends, and workers could strike — a disastrous prospect, considering the nation’s supply chains and the proximity to the holidays.
IF RAIL WORKERS STRIKE, CONGRESS CAN AND SHOULD FORCE THEM BACK ON THE JOB
DHL Global Forwarding said technology companies are beginning to make arrangements to move cargo shipments of semiconductor chips, which are crucial for electronics and the automobile industry, to trucks instead of railroads, according to CNBC.
Goetz Alebrand, head of ocean freight for the Americas at DHL Global Forwarding, said trucking capacity has increased since September, when the prospect of a rail strike began looming.
“This is tech cargo originating out of California,” Alebrand said. “There are more trucks and chassis, but that does not mean there are enough trucks to move all rail cargo onto trucks.”
Last week, SMART Transportation Division, which represents the country’s rail conductors, announced that its members declined to ratify the agreement. Workers at a dozen unions are involved in the railroad negotiations.
The Brotherhood of Locomotive Engineers and Trainmen announced last Monday that its members had approved the agreement, although the union said that it would join SMART-TD in strikes if it ends up being unable to have its members agree before the Dec. 9 deadline.
SMART-TD and BLET combined represent 57,000 workers. In total, four of the 12 unions have voted against the agreement. Complete agreement is needed in order to stave off an economically crippling strike.
If negotiations fail to accumulate support from the union workers in the next few days, more preparations for a strike are set to begin. Railroad carriers begin putting contingencies in place seven days before a possible strike, according to federal safety measures.
Ninety-six hours before the deadline, chemicals will no longer be transported. When a strike appeared possible in September, chemical shipments plunged by nearly 2,000 carloads in the week leading up to the deadline, according to the American Chemistry Council. The ACC on Monday called on Congress and the White House to act quickly to prevent a strike.
“Chemical manufacturers are one of the first industries that will be impacted as railroads start restricting service up to a week before a threatened strike,” said Chris Jahn, ACC’s president and CEO, in a statement. “Freight rail transportation is vital for transporting chemicals critical to everyday life, including water treatment, energy production and food production.”
As the Dec. 9 date approaches, railroads will prioritize moving and securing hazardous materials and goods such as chlorine for drinking water, according to CNBC.
Still, a strike could be prevented by Congress even if there isn’t agreement between all the unions because rail strikes are governed by the Railway Labor Act of 1926 rather than the National Labor Relations Act. Congress has the authority to intervene and force the unions to accept the agreement’s terms.
On Monday, some 400 groups, including the U.S. Chamber of Congress, called upon Congress to act if the unions fail to prevent a strike, given the enormous economic effects that would come with such a massive disruption of critical supply chains.
“The risks to our nation’s economy and communities simply make a national rail strike unacceptable,” read the letter to congressional leaders, according to Reuters. “Therefore, absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow.”
Speaking over the weekend, Rep. Brian Fitzpatrick (R-PA) said that while congressional action is a last-resort measure, lawmakers “will not let this strike happen” if negotiations fail.
“That’s for sure. It would be devastating to our economy. So we’ll get to a resolution one way or another,” Fitzpatrick said. “Failure is not an option here.”
The situation is politically fraught for President Joe Biden, who characterizes himself as a pro-labor president, and Democrats.
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House Majority Leader Steny Hoyer (D-MD) indicated in September that he thinks that the Democratic-controlled Congress would step in to stop a rail strike from coming to fruition.
“A railroad strike at this point in time would be extraordinarily detrimental to our economy and the American people, and we want to avoid that,” Hoyer said.
