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As rail strike looms, US industry braces for impact

(NewsNation) — American consumers and nearly every U.S. industry will be affected if freight trains grind to a halt next month.

One of the biggest rail unions rejected a deal Monday, joining three others that have failed to approve contracts over concerns about demanding schedules and the lack of paid sick time.

That raises the risk of a strike, which could start as soon as Dec. 9 under a deadline that was pushed back Tuesday.

It wouldn’t take long for the effects of a rail strike to trickle through the economy. Many businesses only have a few days’ worth of raw materials and space for finished goods. Makers of food, fuel, cars and chemicals would all feel the squeeze, as would their customers.

United States Secretary of Transportation Pete Buttigieg said the Biden administration’s goal is to make sure a strike doesn’t happen.

“We’ve got to get to a solution that does not subject the American economy to the threat of a shutdown,” Buttigieg told NewsNation’s Leland Vittert. “We don’t have enough trucks or barges or ships in this country to make up for the rail network.”

The dependence on the already-suffering rail system would be tested, especially with other circumstances affecting the supply chain, like a Mississippi River drought affecting much of the midwest.

About 60% of the Midwest and northern Great Plain states are in a drought. Nearly the entire stretch of the Mississippi River — from Minnesota to the river’s mouth in Louisiana — experienced below-average rainfall in the months leading to November.

“While the barge crews, the coast guard, and everybody has done a phenomenal job of dredging the rivers, making use they continue to float boats, the efficiency has been down tremendously,” said Josh Linville, the Vice President of Fertilizer for StoneX Financial Inc. “We are not able to move nearly as much per day.”

Linville says the combination of drought affecting river transportation and the threat of a rail strike affecting rail transportation is a devastating combination that would be very difficult to come back from.

“A rail strike is still going to be tremendously devastating to our agricultural system,” said Linville. “We’re finishing up harvest of 2022, so now, all of a sudden we need to move these grains South. We need to move them internationally. Without rail we can’t do that.”

The stakes are so high for the economy that Congress is expected to intervene and impose contract terms on railroad workers. The last time U.S. railroads went on strike was in 1992. That strike lasted two days before Congress intervened. 

The Associated Press contributed to this report.