A potential railway strike is already wreaking havoc on the economy.

Just the potential of a nationwide railway strike is already hurting the economy as railways pause shipments of hazardous and security-sensitive materials

• More than 90,000 freight railroad workers are preparing to strike for better pay and more time off.
• Officials have warned that the strikes could cost the US economy $2 billion a day.
• But the strikes won’t cause an economic ‘black swan’ event, Goldman Sachs’s Jan Hatzius said.

The mere threat of a statewide rail strike is already harming the US economy.

A potential strike by unionised workers at two of the country’s largest railroad companies, Union Pacific (UNP) and CSX (CSX), which would halt freight shipments, is already having an effect on the flow of products.

According to CNN Business, America’s freight railroads have already stopped accepting shipments of hazardous and other security-sensitive items due to the imminent prospect of a strike.

According to CNN, Union Pacific, one of the main national railroads whose operations would be interrupted by a strike, stated that the measure is intended to “defend employees, customers, and the communities we serve.”

The railroad trade organisation particularly stated that the step is required to “guarantee that no such cargo is placed on an unattended or unprotected train.”

140,000 Employees Seeking Better ‘Quality of Life’ Benefits

The crux of the dispute pits freight companies owned by Warren Buffett’s Berkshire Hathaway (BRK.A), such as Union Pacific, CSX, and BNSF Railway, against labour unions representing around 140,000 workers who are pushing for improvements in “quality of life provisions,” such as agreements on attendance policies, vacation, and sick days.

Ten of the twelve major unions have already struck agreements, but the Brotherhood of Locomotive Engineers and Trainmen, as well as the SMART Transportation Division, are fighting for more.

“The railways are exploiting shippers, customers, and our nation’s supply chain as pawns to persuade our unions to cave in to their contract demands,” the unions stated in a statement. “Our unions will not be intimidated, and Congress must not be intimidated by what can only be defined as corporate terrorism.”

The unions’ stance demonstrates the mounting stakes in what could result in the first nationwide railroad strike in 30 years as early as this Friday. Approximately 60,000 railroad employees, including the engineers and conductors who make up the two-person crews on each train, are poised to go on strike.

Despite the fact that 45,000 other union members are members of unions that have tentative agreements with the railroads, a strike by engineers and conductors would bring the freight rail system, which transports nearly 30% of the nation’s freight, to a halt – just in time for the busy holiday shopping season.

A National Economic Disaster on the Horizon

According to the US, a large rail strike might give yet another damage to the US economy, potentially causing a national economic disaster. The Chamber of Commerce

Indeed, a sudden halt in freight railway traffic is the last thing the United States economy needs as it struggles to recover from several years of supply chain issues that have already left store shelves barren and prompted temporary factory closures due to a lack of just-in-time parts – fueling inflation.

Railroad and airline personnel are subject to a distinct set of labour laws than the vast majority of private-sector workers. The Railway Labor Act, the country’s oldest labour law, empowers Congress to intervene to keep workers on the job during a strike or lockout.

However, it is unclear whether Congress would be able to act quickly enough to find a bipartisan solution to avert a strike, especially given the upcoming midterm elections.

“The railways have demonstrated no intention of negotiating an agreement with our unions, but they cannot legally lock out our people until the cooling-off period expires,” the union stated in a statement. “Instead, they will begin shutting out their customers on Monday, severely damaging the supply chain in an attempt to elicit congressional action.”