Post by pantsonfire on Sept 14, 2022 22:41:55 GMT
abc7.com/freight-rail-strike-metra-lines-cancellations-amtrak-tickets/12230007/
The US economy can keep running without freight trains - but not for long.
That is why the risk of the first national railroad strike in 30 years is so worrying to economists and businesses.A brief work stoppage - some previous rail strikes have lasted only hours - likely won't cause much economic disruption.
But a prolonged walkout of a week or more will cripple the nation's still struggling supply chain, cause widespread shutdowns and shortages, and likely further drive up prices even as inflation remains near a 40-year high.
"At a week, you see real damage in the US economy," said economist Patrick Anderson of Anderson Economic Group, which conducts impact estimates on work stoppages.
If it lasts a week, a strike will mean reduced gas production, spoiled crops, a choked off supply of new cars and empty shelves at stores over the holidays. Your commute may be snarled. And for factory workers, there could be temporary layoffs in the near future.
America's railroads remain crucial for keeping the US economy running smoothly. They carry nearly 30% of the nation's freight, measured by the distance traveled and the weight of the cargo, according to the Bureau of Transportation Statistics. And there really isn't an alternative if the trains stop running.
"Idling all 7,000 long distance daily freight trains in the US would require more than 460,000 additional long-haul trucks every day, which is not possible based on equipment availability and an existing shortage of 80,000 drivers," said Chris Spear, CEO of the American Trucking Associations in a letter to members of Congress asking that they act to prevent a strike. "As such, any rail service disruption will create havoc in the supply chain and fuel inflationary pressures across the board."
Anderson said it is impossible to come up with a dollar estimate for the impact on the economy at this point, but he said the costs will grow geometrically the longer the strike lasts, starting out at tens of millions of dollars and growing rapidly each day.
"It might only be millions, but that's a lot if it's your job that's one that is being lost," he said. "If we reach a week-long strike, we're in uncharted territory," he said.
GASOLINE
The price of gas has been falling steadily for three months. But a rail strike could send prices shooting higher again due to limited supplies.
Refineries get most of their crude oil via pipelines and ship out most of the products they produce, such as gas, diesel and jet fuel, via pipelines as well. But railroad tank cars are a key part of the process to make the gas that ends up in your tank.
Just about all ethanol that goes into gasoline moves by rail. Without ethanol, gasoline wouldn't be compliant with some environmental regulations. But even if those regulations could be waived, the lack of ethanol could increase the cost of a gallon of gas by about 16 cents due to the loss of tax breaks, according to Tom Kloza, global head of energy analysis for OPIS.
Although pipelines carry most crude oil to refineries, about 300,000 barrels move by rail each day, a volume that could supply about two mid-size refineries, according to data from the American Fuel and Petrochemical Manufacturers, the refineries' trade group. Numerous chemicals used in the refining process also arrive via rail, and some lower-grade products and waste materials need to be shipped out by rail.
"If rail cars aren't coming in regularly to pick up facility products, including the sulfur that refiners remove from crude oil, production will have to curtail," the refineries' trade group said.
FOOD
The strike would be hitting at a particularly bad time for the nation's agricultural industry. Bureau of Transportation Statistics data show that trains account for 27% of the distance grains travel when measured by weight.
"A rail stoppage on September 16 would hit right as the fall harvest accelerates in many parts of the United States," said Mike Seyfert, CEO of the National Grain and Feed Association. "The economic damages across the food and agricultural supply chain would be swift and severe."
The railroads started refusing to take new shipments of grain as of Wednesday in preparation for the possible strike. If the work stoppage happens, grain operators will load what they can onto rail containers sitting in their yards. But they won't be able to move them out or accept additional grain from farmers, who will then have limited options to sell their crops.
In recent months there have been improvements to farmers' supply chain issues suffered during the pandemic.
The gains we've made in the last seven to eight months will be reversed largely if this strike happens," said Terri Moore, spokesperson for the American Farm Bureau Federation.
In addition, farmers preparing to plant for the fall season could see shortages of the fertilizer they need, since the railroads have already stopped accepting shipments because they are classified as hazardous materials in many cases. That could hurt future supplies of crops.
"There definitely would be at least some price increase for consumers," said Max Fisher, chief economist at the National Grain and Feed Association. "If our processing plants are not running, the food manufacturers that buy these ingredients won't have access to them for an extended period of time. Depending on how long it would go on, we worry about scarcity - being able to actually get the food."
Beyond domestic food prices, the strike could affect global food markets, since the US is a major grain exporter. With the war in Ukraine cutting off much the grain from that country, a disruption in US supply will only make a bad situation worse.
The US economy can keep running without freight trains - but not for long.
That is why the risk of the first national railroad strike in 30 years is so worrying to economists and businesses.A brief work stoppage - some previous rail strikes have lasted only hours - likely won't cause much economic disruption.
But a prolonged walkout of a week or more will cripple the nation's still struggling supply chain, cause widespread shutdowns and shortages, and likely further drive up prices even as inflation remains near a 40-year high.
"At a week, you see real damage in the US economy," said economist Patrick Anderson of Anderson Economic Group, which conducts impact estimates on work stoppages.
If it lasts a week, a strike will mean reduced gas production, spoiled crops, a choked off supply of new cars and empty shelves at stores over the holidays. Your commute may be snarled. And for factory workers, there could be temporary layoffs in the near future.
America's railroads remain crucial for keeping the US economy running smoothly. They carry nearly 30% of the nation's freight, measured by the distance traveled and the weight of the cargo, according to the Bureau of Transportation Statistics. And there really isn't an alternative if the trains stop running.
"Idling all 7,000 long distance daily freight trains in the US would require more than 460,000 additional long-haul trucks every day, which is not possible based on equipment availability and an existing shortage of 80,000 drivers," said Chris Spear, CEO of the American Trucking Associations in a letter to members of Congress asking that they act to prevent a strike. "As such, any rail service disruption will create havoc in the supply chain and fuel inflationary pressures across the board."
Anderson said it is impossible to come up with a dollar estimate for the impact on the economy at this point, but he said the costs will grow geometrically the longer the strike lasts, starting out at tens of millions of dollars and growing rapidly each day.
"It might only be millions, but that's a lot if it's your job that's one that is being lost," he said. "If we reach a week-long strike, we're in uncharted territory," he said.
GASOLINE
The price of gas has been falling steadily for three months. But a rail strike could send prices shooting higher again due to limited supplies.
Refineries get most of their crude oil via pipelines and ship out most of the products they produce, such as gas, diesel and jet fuel, via pipelines as well. But railroad tank cars are a key part of the process to make the gas that ends up in your tank.
Just about all ethanol that goes into gasoline moves by rail. Without ethanol, gasoline wouldn't be compliant with some environmental regulations. But even if those regulations could be waived, the lack of ethanol could increase the cost of a gallon of gas by about 16 cents due to the loss of tax breaks, according to Tom Kloza, global head of energy analysis for OPIS.
Although pipelines carry most crude oil to refineries, about 300,000 barrels move by rail each day, a volume that could supply about two mid-size refineries, according to data from the American Fuel and Petrochemical Manufacturers, the refineries' trade group. Numerous chemicals used in the refining process also arrive via rail, and some lower-grade products and waste materials need to be shipped out by rail.
"If rail cars aren't coming in regularly to pick up facility products, including the sulfur that refiners remove from crude oil, production will have to curtail," the refineries' trade group said.
FOOD
The strike would be hitting at a particularly bad time for the nation's agricultural industry. Bureau of Transportation Statistics data show that trains account for 27% of the distance grains travel when measured by weight.
"A rail stoppage on September 16 would hit right as the fall harvest accelerates in many parts of the United States," said Mike Seyfert, CEO of the National Grain and Feed Association. "The economic damages across the food and agricultural supply chain would be swift and severe."
The railroads started refusing to take new shipments of grain as of Wednesday in preparation for the possible strike. If the work stoppage happens, grain operators will load what they can onto rail containers sitting in their yards. But they won't be able to move them out or accept additional grain from farmers, who will then have limited options to sell their crops.
In recent months there have been improvements to farmers' supply chain issues suffered during the pandemic.
The gains we've made in the last seven to eight months will be reversed largely if this strike happens," said Terri Moore, spokesperson for the American Farm Bureau Federation.
In addition, farmers preparing to plant for the fall season could see shortages of the fertilizer they need, since the railroads have already stopped accepting shipments because they are classified as hazardous materials in many cases. That could hurt future supplies of crops.
"There definitely would be at least some price increase for consumers," said Max Fisher, chief economist at the National Grain and Feed Association. "If our processing plants are not running, the food manufacturers that buy these ingredients won't have access to them for an extended period of time. Depending on how long it would go on, we worry about scarcity - being able to actually get the food."
Beyond domestic food prices, the strike could affect global food markets, since the US is a major grain exporter. With the war in Ukraine cutting off much the grain from that country, a disruption in US supply will only make a bad situation worse.
