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

A GE AC4400CW electric train in Union Pacific livery, seen before a contract with the railroads, as a Metrolink train (right) arrives at Union Station in Los Angeles, California, US, Sept 15, 2022. [Photo/Agencies]

The coming rail strike could affect the US economy and food, oil, auto and pharmaceutical manufacturers, as well as their customers, leaving them all in trouble, according to an article published on the Fortune website on Wednesday.

The risk of a US rail strike is rising, which could begin on Dec 5, according to the author. It would cost the economy a lot, as many businesses have limited production capacity and out-of-stock shopping centers and commuters are shut down because most passenger railroads use freight railroad tracks.

“And major train services in Chicago, Minneapolis, Maryland and Washington state have warned that some of their services will be suspended if the tracks collapse.” The author said.

“Railways carry about 40 percent of the world’s freight each year.” The author added. Economic losses could reach $2 billion (14.2 billion yuan) a day, and 700,000 people could lose their jobs as prices for almost everything rise, causing the economy to collapse.

According to the trade group Association of American Railroads, it is estimated that an additional 467,000 cars per day would be needed to operate the entire railroad.

About 30 percent of all packaged food in the U.S. is moved by rail, said Tom Madrecki, vice president of the Consumer Brands Association, and that number can be higher for heavier, heavier products like soup cans.

“Big food companies don’t like to talk about the rail threat because they’re worried about supply shortages that could lead to panic buying.” He said.

Jeff Sloan with the trade group American Chemistry Council said once the outbreak started, chemical plants could be on the verge of shutting down. As a result, consumers may also have to pay more for gasoline.

Pork and poultry producers in the southern US will be hit hard as the cost of trucking food will increase. They can’t go without rail services for long before they close the mills and face problems,” said Max Fisher, NGFA chief financial officer.

Retail companies are also making contingency plans because they are worried about shipping products for the Christmas holiday, the author explained. At the same time, the trucking industry would suffer greatly in the event of a strike, “because about 75 percent of new cars start their journey from factories to railroad depots. Trains carry up to 2,000 cars a day.” Automakers seem unable to maintain their plants during the strike.

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