Supply Chain Update: Rail Road Strike Averted, for Now

By Jacob Wright

Supply chain woes are not a sudden development, rather a topic of discussion ever since COVID-19 hit in 2020. But what has been sudden are the new, ever-growing reasons for why the supply chain continues to face challenges.

A brief timeline of supply chain disruptions starts with the height of the pandemic, then the Russia-Ukraine conflict, new outbreaks of COVID in China, and now railroad strikes are a legitimate concern. Most of these were outright unpredictable, and all have caused significant damage to the supply chain.

Beginning in early September, the possibility of a nationwide railroad strike loomed over many businesses and industries that rely on rail freight for product delivery. With the rail freight network accounting for roughly 40% of US freight volume, it’s easy to see how a strike would make any earlier improvement in the supply chain seem insignificant.

Thankfully, a deal struck on September 15 between railroads, unions and the Biden Administration ended the present crisis.

The five-year deal included a 24% pay increase, $5,000 in bonuses and a commitment by railroads to implement more lenient scheduling policies for employees.

However, not all is said and done.

Many railroad workers believe the agreement is intentionally vague and does not meet their demands of personal time off and sick leave without being penalized. This deal only averted a strike from happening until at least September 29. This gives some time for our industry to plan and adjust their logistics strategy in the event that talks fall through, or if Congress is forced to get involved.

Trucking freight is already plenty backed up, especially when it comes to moving product from ports to destination, making alternatives to rail freight very slim. Lighting maintenance contractors should factor in the possibility of even longer lead time for products needed for retrofits and alter or plan maintenance schedules based on ever-evolving lead times and availability.

November LM&M will feature an update on the situation and the ripple effects of the decision yet to come. Stay tuned. ■