ISSUE BRIEF September 14, 2022
BUSINESS IMPACT OF A NATIONAL RAILROAD STRIKE OVERVIEW: Negotiations between U.S. railroad union and companies began in November 2019. In an executive order in July 2022, President Biden blocked a strike from occurring and created the Presidential Emergency Board (PEB). In August, the PEB provided recommendations1 to the parties. These recommendations did not include key changes that would prevent the strike for three of the twelve unions. Nine unions reached an agreement based on the recommendations. But if all twelve do not reach agreements, a strike will occur. The “cooling off period” is set to end Friday, Sept. 16, 2022. Three actions can prevent the strike from occurring: 1. The remaining unions agree to the PEB recommendations. 2. Extending the current "cooling off" period. 3. Congressional intervention.
IMPACT ON BUSINESSES: Even if an agreement is reached, there will likely be supply chain issues. With roughly 30% of freight movement happening by railway, businesses and consumers can expect delays and higher prices. The severity of both depend on how long the strike lasts. If an agreement is not reached by Friday, Sept. 16 and a strike occurs, the economic fallout is staggering. A strike is expected to result in a $2 billion economic loss per day. U.S. consumers would see disruptions in Amtrak services, food shortages, delays in production, a further lack of new vehicles for purchase and higher prices. In Oklahoma, alone, there are 3,850 miles of rail track with 20 rail operators in the state. Annually Oklahoma sees 226 million tons of cargo and 5 million carSloads of freights pass through the state.2
MORE INFORMATION:
U.S. Chamber – How a National Rail Shutdown will Impact Consumers
PEB Recommendations, August 16, 2022: https://nmb.gov/NMB_Application/wpcontent/uploads/2022/08/PEB-250-Report-and-Recommendations.pdf 2 Oklahoma Department of Commerce, Infrastructure and Transportation: https://www.okcommerce.gov/doing-business/business-relocation-expansion/infrastructure-transportation/ 1
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U.S. Chamber Letter to Congress The Economic Impact of Railroad Shutdown Service updates from the major freight carriers. BNSF CN CSX Norfolk Southern UP
**SCRF will continue to monitor developments of this matter as it relates to impacts on businesses.
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