Posted by Curt on 14 September, 2022 at 9:02 am. 8 comments already!



We live in a country where the (currently) ruling political party and most of the national media have a symbiotic relationship. (Jen Psaki started work at NBC News this week.) One of the problems with this dynamic is that when the ruling class decides something is important — say, emphasizing the issue abortion as the midterm elections approach — it tends to squeeze out everything that the ruling party doesn’t want emphasized.
Don’t get me wrong; abortion is a hugely important issue to many Americans. You can read more about South Carolina senator Lindsey Graham’s bill from Alexandra DeSanctis and Charlie Cooke and John McCormick and Kathryn Jean Lopez.
But there are a lot of things going on in this world, and one issue that seems spectacularly under-covered — a ticking time bomb, if you will — is that starting at 12:01 a.m. Friday, or about a day and a half from now, if there isn’t a deal between freight-rail unions and employers, the U.S. economy comes to a screeching halt and . . . well, the term “derails” seems fitting.
Maybe there will be an eleventh-hour deal; I suspect many casual observers simply assume that a deal will get done because the consequences of even a brief work stoppage are so far-reaching. But freight companies are already halting certain shipments in preparation for a potential strike, so in some ways, the consequences of a strike are already here.
The American Association of Railroads said that this week they’ve begun taking steps to secure the shipments of hazardous and security-sensitive materials, such as chlorine used to purify drinking water and chemicals used in fertilizer, and warned that, “other freight customers may also start to experience delayed or suspended service over the course of [this] week, as the railroads prepare for the possibility that current labor negotiations do not result in a resolution and are required to safely and securely reduce operations.”
At noon today, Norfolk Southern will close all gates to intermodal traffic — that means anything using multiple modes of transportation such as rail, ship, aircraft, and truck. BSNF Railway, one of the largest freight railroads in North America, announced it was making the same move.
Amtrak has already suspended most cross-country routes and announced that, “It will only operate trains that can reach their final destination by 12:01 a.m. on Friday, when a freight rail strike or lockout could begin.” Without a deal, most Amtrak operations in California will suspend operations Thursday.
A freight-rail strike will also bring commuter-rail services to a halt in some areas: “Virginia Railway Express said if there is a strike it would immediately stop all of its commuter train service because Norfolk Southern owns the tracks for VRE’s Manassas Line, and CSX owns the tracks for its Fredericksburg Line.” Across the Potomac in Maryland, “Since CSX owns and maintains the Camden and Brunswick lines in addition to dispatching MARC trains, any labor strike would result in the immediate suspension of all MARC Camden and Brunswick Line service until a resolution is reached.” It’s the same story for Metra, the commuter-rail system in the Chicago metropolitan area serving the city of Chicago and its surrounding suburbs, and Metrolink, the commuter-rail service in southern California.
The U.S. Department of Transportation estimated that a freight-rail strike would cost the economy about $2 billion a day, but that’s just a big, abstract figure in most people’s minds. What Americans will notice is all kinds of products getting scarcer and more expensive. (Again.) As our Dominic Pino notes, crude oil, natural-gas liquids, refined products, petrochemicals, and plastics are transported by rail, meaning that a disruption in rail service is likely to spur a gas price rise again. The average price for a gallon of regular unleaded gas nationwide is currently $3.70, which is better than the $5-per-gallon price of mid June, but it’s still high by historical standards.
Once again, if you read local press or trade publications, you realize how many things in this country grind to a halt if there’s a freight-rail strike. From EnergyWire:

Chemicals make up the second-largest category of rail freight after coal — 55,000 carloads a week — and there aren’t enough trucks and barges to handle the volume, said Jason Miller, a professor in the department of supply chain management at Michigan State University.
A prolonged strike would have a bigger impact on the economy than the shutdowns during the Covid-19 pandemic, Miller said.
“At least during Covid, you able to keep [chemical] production going, oil production going,” he said. “You can’t do that with a rail strike.”

Farmers have a limited window to get their harvested crops to buyers before the food spoils, and for many crops, this is harvest time; farmers are now wondering if the usual rail options will be available after Friday:

A painful example of supply chain concern can be found in soybean farming. Hungry markets in Asia and elsewhere count on soybeans to make the ships in the Gulf of Mexico and the west coast.
“It’s gonna be devastating because just about all of the soybeans that are produced here go to a crush plant, and that crush plant is in Hastings, and they send two unit trains of soybean meal per week to the Pacific Northwest,” Greving said. He sits on the USDA United Soybean Board. “That is loaded on bulk vessels there and shipped to Southeast Asia.”
The price of oil affects everybody, farmers included. A rail shutdown would also stop the delivery of corn to most ethanol plants.

Remember, much of the world’s food markets are still reeling from the effects of the Russian invasion of Ukraine and the near-complete shutdown of Ukraine’s food exports.
Yesterday, I briefly mentioned the disruption to coal getting to electric power plants. Grist lays out why there aren’t any realistic alternatives to get coal to those plants:

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