US Government Prepares for Rail Shutdown with Contingency Plans

L.A. and Washington (US government)
The administration of President Joe Biden took steps on Tuesday to prepare for the possibility of a shutdown of the American rail system and to ensure the delivery of essential goods. At the same time, the administration pushed railroads and unions to come to an agreement to prevent a work stoppage that would affect both freight and passenger service.

US government rail shutdown
A BNSF rail terminal worker monitors the departure of a freight train, in Galesburg.

Potential shutdown

The hypothetical shutdown, which could occur as soon as this Friday, might halt about 30% of cargo exports to the United States, fuel inflation, obstruct the supply of food and gasoline, cost the American economy approximately $2 billion daily, and create transportation problems.

Three holdout unions representing nearly 60,000 workers have until one minute after midnight on Friday to reach tentative agreements with railroads including Union Pacific, BNSF of Berkshire Hathaway, CSX, and Norfolk Southern.

Union strikes or employer lockouts may occur if agreements are not achieved. The Democratic-led U.S. Congress could step in and intervene by extending negotiations or adopting settlement terms, but the railways and unions could also decide to remain at the negotiating table.

Administration determining the supply chain

The Biden administration’s push comes as food, energy, automotive and retail groups implore Congress to intervene, saying a rail shutdown could threaten everything from global grain supplies to shipments of goods related to Christmas holiday shopping.

In the event that train service is interrupted, the administration is asking truckers and air shippers for help, and it is also thinking about using emergency powers, according to White House press secretary Karine Jean-Pierre. The administration, according to Jean-Pierre, holds daily interagency meetings to determine which supply chains and commodities are most at risk.

Shutdown can affect American employees

According to a White House official who spoke to Reuters under the condition of anonymity, the administration has informed railways and unions that “a shutdown is unacceptable and will affect American employees, families, and companies, and they must take steps to stop it.”

Impact on food suppliers and online merchants

Additional regulations that certain railroads intend to enact may have an impact on food suppliers and online merchants who employ intermodal services, which link ships, trains, and trucks. The Western US-focused BNSF announced that it will stop taking chilled intermodal traffic. The eastern U.S. carrier Norfolk Southern said that it will stop taking all intermodal shipments.

Amtrak, the U.S. passenger railroad that uses tracks maintained by freight railroads, is experiencing an increase in disruptions. Following the start of train cancellations on four long-distance routes on Tuesday, Amtrak announced that it would cancel trains on seven additional long-distance routes on Wednesday.

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