US government makes contingency plans for rail shutdown
President Joe Biden's administration on Tuesday made contingency plans aiming to ensure deliveries of critical goods in the event of a shutdown of the US rail system while pressing railroads and unions to reach a deal to avoid a work stoppage affecting freight and passenger service.
The potential shutdown, which could come as early as Friday, could freeze almost 30% of U.S. cargo shipments, stoke inflation, impede supplies of food and fuel, cost the U.S. economy about $2 billion per day and cause transportation woes.
Railroads including Union Pacific, Berkshire Hathaway's BNSF, CSX and Norfolk Southern have until a minute after midnight on Friday to reach tentative deals with three hold-out unions representing about 60,000 workers.
If agreements are not reached, there could be union strikes or employer lockouts. But the railroads and unions also could agree to stay at the bargaining table or the Democratic-led U.S. Congress could intervene by extending talks or establishing settlement terms.
The Biden administration's push comes as food, energy, automotive and retail groups implore Congress to intervene, saying a rail shutdown could threaten everything from global grain supplies to shipments of goods related to Christmas holiday shopping.
White House Press Secretary Karine Jean-Pierre said the administration is asking truckers and air shippers to assist should rail service cease and also is considering invoking emergency authorities. Jean-Pierre added that the administration is hosting daily interagency meetings to assess which supply chains and commodities are at the highest risk.
The White House has told railroads and unions that "a shutdown is unacceptable and will hurt American workers, families and businesses, and they must take action to avert it," a White House official told Reuters, speaking on condition of anonymity.
One key issue is ensuring the "continued distribution of vital hazardous materials that depend on rail transport, such as chlorine for water treatment plants," this official added. Railroads on Monday stopped accepting shipments for hazardous materials such as chlorine and chemicals used in fertilizer so they are not stranded in unsafe locations if rail traffic stops.
The U.S. energy sector relies on railroads to move coal, crude oil, ethanol and other products.
Some railroads plan to impose additional restrictions that could impact food suppliers and online retailers that use intermodal services that connect ships, trains and trucks. BNSF, which serves the western United States, said it will stop accepting refrigerated intermodal cargo. Norfolk Southern, which serves the eastern United States, said it will stop accepting all intermodal shipments.
U.S. passenger railroad Amtrak, which uses tracks maintained by freight railways, is facing growing disruptions. Amtrak said it will cancel trains on seven more long-distance routes on Wednesday after it began cancelling trains on four long-distance routes on Tuesday.
