Bloomberg reports that a possible strike by US rail workers threatens to delay the movement of consumer goods from China and disrupt global supply chains trying to recover from disruptions caused by the pandemic and the war between Ukraine and Russia.
The US imported about $47 billion worth of goods from China in July. The Association of American Railroads (AAR) warned of massive losses in the event of the strike. roughly more than $2 billion a day.
US railroad companies and unions are in talks to avert a workers’ strike on Friday. Containers are already stuck at US train stations due to staff and equipment shortages.
According to supply chain data provider project44, wait times have increased from less than a day to more than two days.
Freight rates have been falling steadily since a record last year as consumer demand has eased. Inflation is affecting personal spending and retailers are running out of warehouse space to store goods.
US President Joe Biden was desperate to avert a catastrophic railcar strike that could exacerbate rapid inflation.
The White House was reportedly considering contingency measures to keep essential goods and supplies flowing, urging railroad companies and unions to come to an agreement before a Friday deadline.
Union federations have insisted employees can take unpaid time off for doctor’s appointments, a requirement rail companies refused to grant.
Negotiators from the railways and unions reached an agreement this morning preliminary agreement that reconciles the needs of employees, companies and the economy.
President Biden tweeted“This is a win for the economy and for the American people. Railway workers will get better pay, better working conditions and peace of mind about their healthcare costs.”
Railroad and shipping stocks gain after deal.
