5 ways a national rail strike could affect you

Freight trains may not be top of mind for most consumers, but there is potential national rail strike could soon affect almost every aspect of commerce in the United States, affecting the daily lives of millions of Americans.

A work stoppage could begin early Friday morning just after midnight. That’s when a 30-day “cooling off” period ends under a law called the Railway Labor Act, which governs contract negotiations in the rail and airline industries. The Biden administration has been working to avert a possible rail strike before that deadline.

Stopping freight trains can cost the U.S. economy more than $2 billion per day, according to the Association of American Railroads. If a shutdown were to last more than a few days, the impact would likely be felt by millions of consumers as it would disrupt shipping of retail products, coal and manufacturing components. Commuters would also be out of luck, as many passenger trains run on the freight tracks that would be idled in a strike, experts say.

A strike “would really affect everyday life and the fundamentals of how we live in society,” Rachel Premack, editorial director of supply chain market research firm FreightWaves, told CBS MoneyWatch.

She added, “There’s all these weird random things that we don’t think about day to day, but that are pretty fundamental to our lives” that are transported by train, like cement and lumber.

If a shutdown lasted only one to three days, the impact could be muted, especially given that there is less freight traffic on Fridays, Saturdays and Sundays, according to Jason Miller, chairman of supply chain management at Michigan State University. But if a strike lasted until the middle of next week or beyond, “that’s when it becomes very disruptive,” he told CBS News.

Canceled commuter trains

Some travelers are already feeling the impact, and Amtrak was suspended Wednesday all its long-haul routes to ensure that the rail service’s trains can reach their final destinations ahead of the possible strike. Amtrak and some commuter rail services around the U.S. rely on freight tracks to run passenger trains, which is why some are preparing for potential disruptions.

Metra, a Chicago-area train service, warned Tuesday that nine of its 11 lines could be affected because they use freight lines or are shipped by freight companies. Around 14 million passenger trips were taken on Metra last year, according to the service. Two of the lines, the Metra Electric and Rock Island lines, will continue to run because they own, operate and control those tracks, it added.

Other commuter lines that have warned of possible service disruptions include the Maryland Transit Administration and the San Joaquin Regional Rail Commission in California.

Longer waiting time for new cars

Because most new vehicles are shipped from the factory or to the dock by rail, there is not enough trucking capacity to handle all of these vehicles in the event of a strike. This will mean even longer waiting times for dealers and motorists to get hold of new cars.

A strike can also disrupt vehicle production because automakers receive parts and raw materials by rail.

Higher energy costs

Coal, which is mostly transported by rail, provides about 20% of America’s power. If deliveries are delayed, it could cause energy prices to rise, Michigan State’s Miller said.

Many hazardous fuels or gases are also shipped by rail because it’s safer than being transported by truck, said Bindiya Vakil, CEO of Resilinc, a Fremont, Calif.-based supply chain tracking company. “Because of all of these things, you could see the transportation of your gas shipments to your local gas stations being disrupted — a lot of that is also transported by rail.”

Only shelves in stores

The railways have announced plans to stop shipping refrigerated goods before the strike deadline, so that there may be disruptions in deliveries of produce, meat and other goods.

Food producers can also be affected. Farming groups say even a short strike would disrupt shipments of feed to livestock and poultry producers, which could drive up the price of meat.

Similarly, many building materials are sent by train, everything from lumber to cement, so there may be a shortage of these materials in home stores. Builders will also be affected if they are unable to obtain supplies of lumber and other necessary products.

Higher inflation

Experts say further pressure on energy and food costs is likely to increase hottest inflation in 40 years now affecting household budgets. But it is difficult to measure exactly how big the impact might be, since it will be determined by the length of the strike, if it occurs.

Many experts believe a strike will not last long because Congress is likely to step in and force a resolution, as has happened during previous shutdowns.

“It’s like your body and your blood is not being delivered — that’s how bad it is,” Vakil said of the impact of a rail strike. “In fact, in the 1980s, Congress walked in after four days because of the pain that was being felt. That quickly becomes a really bad situation.”

— With reporting by Irina Ivanova and the Associated Press.

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