Education Images | Universal Images Group | Getty Images The U.S. chemical industry is one of the biggest users of rail freight, shipping more than 33,000 shipments a week and predicts billions of dollars in economic damage if a labor deal is not reached between railroad companies and unions before a possible strike in December. A new economic analysis released by the American Chemistry Council estimates that a rail strike would impact about $2.8 billion in weekly chemical cargo, with a month-long strike resulting in a total hit to the economy of $160 billion, or one percentage point of GDP. ACC represents companies in the industrial, energy and pharmaceutical sectors, among other manufacturing niches, including 3M, Dow, Dupont, Exxon Mobil, Chevron, BP and Eli Lilly. Chemicals are among the most sensitive cargo carried by freight rail companies and the first to be dealt with when there is a risk of a strike. Strike preparation plans released by the railroads in September, when a looming work stoppage was averted, indicated that freight companies would begin securing critical chemicals such as chlorine for drinking water in normal cargo seven days before the strike date. Ninety-six hours before the strike deadline, all chemical shipments are no longer moving. “AAR data shows there was a drop of 1,975 carloads of chemical cargo during the week of September 10 when railroads stopped accepting shipments due to the threat of a strike,” said Jeff Sloan, ACC’s senior director of transportation policy. “We would expect a similarly dramatic drop in chemical shipments if an embargo were to take place this month.” The start of rail strike preparations will depend on the results of voting by some of the largest railroad unions that have yet to ratify the labor agreement proposed by President Biden’s Presidential Emergency Council. The two largest unions, the Transportation Division of the International Union of Sheet Metal, Aviation, Railroad and Transportation (SMART-TD) and the Brotherhood of Locomotive Engineers and Trainers (BLET), a division of the Railroad Conference of the International Brotherhood of Teamsters, will announce the results of of their vote on Monday 21 November. If both unions ratify the tentative agreement, the strike date for which the railroads will begin is Dec. 5. This is the day the Brotherhood of Maintenance of Way Employees Division (BMWED) and the Brotherhood of Railroad Signalmen (BRS) can strike. The withdrawal period ends on December 4. The International Brotherhood of Boilermakers rejected the labor agreement Monday but said it would continue to negotiate during the walkout period. If SMART-TD or BLET reject the deal, the strike date will be December 9, the day after the cooling-off period ends. BMWED said it would extend its own cooling-off period to align with the new strike date. BRS has yet to announce a similar extension of the cooling-off period. These dueling dates only add to the logistical planning challenges. “Railroads will stop shipping chemicals essential to everyday life well in advance of a strike, including products that are vital to the production of safe drinking water and food,” Sloan said. “Many chemical plants will be forced to close within the first week of the embargo on rail services.” AAR says the impact of a potential strike would be felt almost immediately in almost every sector of the economy. He asked Congress to step in, using the power it has to enforce a deal under the Railroad Labor Act. Its economic analysis predicts a rise in a key inflation gauge, the Producer Price Index – which showed signs of cooling on Tuesday – by 4%. “American consumers and manufacturers are still struggling to cope with inflation and do not need to be hit by another crisis,” said Chris Jahn, president of the ACC. “This is an economic disaster that every member of Congress should care deeply about preventing, and we call on policymakers to act quickly on legislation that would enact the terms that labor leaders and railroads agreed to in September.”
