Rail strike would destroy US’ economy by costing $2b per day: Fortune

A GE AC4400CW diesel-electric locomotive in Union Pacific paint, seen ahead of a possible strike if no agreement is reached with railroad workers’ unions, as a Metrolink commuter train (right) ) to Union Station in Los Angeles, California, USA, September 15, 2022. [Photo/Agencies]

An impending rail strike will hit the U.S. economy and producers of food, fuel, automobiles and chemicals, according to an article published on the website Fortune on Wednesday. like their customers, putting them all under pressure.

According to the author, the risk of a railroad strike in the US is increasing, possibly starting from December 5. It will take a huge toll on the economy, as many businesses only have raw materials and space for finished products for a few days and passengers will be stranded as many passenger rail lines use owned tracks. of freight railways.

“And major commuter rail services in Chicago, Minneapolis, Maryland and Washington state all subsequently warned that some of their operations would be suspended in the event of a rail strike.” The author said.

“Railways carry about 40 percent of the nation’s freight each year.” The author added. The loss of the economy would amount to 2 billion dollars (14.2 billion yuan) a day and 700,000 people could lose their jobs while the price of most things would go up, contributing to the economic downturn. economic.

According to the American Railroad Association trade group, an additional 467,000 trucks per day are estimated to be needed to handle everything the railroad has to offer.

About 30 percent of packaged food in the US is shipped by rail, and the number is larger for heavier items, said Tom Madrecki, vice president of supply chain for the Consumer Brands Association. thicker like a can of soup.

“Major food companies are reluctant to discuss the threat of a rail strike because of concerns about product shortages that could lead to panic buying.” I said.

Jeff Sloan with the American Chemistry Council trade group said that when the strike begins, chemical plants could be nearing closure. As a result, consumers will also have to pay more for gasoline.

Pork and chicken producers in the southern U.S. states will be hardest hit as the cost of transporting feed by truck will soar. “They couldn’t be without rail service for too long before they had to shut down feed mills and run into problems,” said Max Fisher, chief economist at the NGFA.

The retail industry is also developing contingency plans as they worry about shipping items for the Christmas holiday, the author explains. At the same time, the auto industry will be more affected if strikes happen, “because about 75% of all new vehicles start their journey from factory to dealer on rail. transporting about 2,000 wagons a day.” Automakers are unlikely to be able to keep factories running during the strike.

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