Semiconductor chip manufacturers preemptively shifted their transportation to trucks after the White House’s Presidential Emergency Board failed to broker a deal that would prevent a national freight rail strike.
“We hit a spot where even if we could get the parties to agree at a table, the period to ratify would run past the shutdown date” a senior White House aide reportedly said. “So, it just became impossible to get a deal agreed to and ratified before the key date.”
Technology companies have reportedly pivoted away from freight rail transportation to avoid shipment delays. The conventional wisdom is that railroads will be tasked with prioritizing cargo should a walkout occur. DHL Global Forwarding, an international freight and logistics operation, has taken proactive measures with a railroad strike looming.
“DHL Global Forwarding has advised customers of the serious impact that a rail strike could have on their operations, including delays and related detention and demurrage charges. Our first priority has been to make them aware of this situation so that they can prepare for the risk of delays in receiving the merchandise,” Goetz Alebrand, head of ocean freight for the Americas at DHL Global Forwarding, reportedly said. “There are more trucks and chassis, but that does not mean there are enough trucks to move all rail cargo onto trucks.”
Alebrand noted that his clients’ cargo is generally non-perishable and would not necessarily receive priority shipping. Other sectors appear to have retooled their freight transportation preferences as well. Chemicals, for example, cannot be transported four full days before an announced strike. But as the labor-management negotiations became heated and the White House deal was rejected, a 1,975-carload dip in chemical products was sustained during early September. That’s when freight rail unions were likely to launch a strike.
With a possible Dec. 9 strike on the table that could disrupt the country’s supply chains, Congress is expected to intervene and force freight rail union members to take a deal. But like the missteps of the Presidential Emergency Board, lawmakers appear to be overly focused on wages. Union members rejected the proposed collective bargaining agreement because it did not address working conditions and adequate sick time.
“A call to Congress to act immediately to pass legislation that adopts tentative agreements that exclude paid sick leave ignores the Railroad Workers’ concerns,” a union response reportedly states. “It both denies Railroad Workers their right to strike while also denying them of the benefit they would likely otherwise obtain if they were not denied their right to strike.”
The positions taken by lawmakers have been something of a mixed bag. Senators such as Florida’s Marco Rubio are hesitant to intervene and back the right to strike. Vermont’s Bernie Sanders recently pushed to add language to the proposed deal that would meet many of the freight rail workers’ demands.
“At a time of record profits in the rail industry, it’s unacceptable that rail workers have ZERO guaranteed paid sick days,” Sen. Sanders reportedly tweeted. “It’s my intention to block consideration of the rail legislation until a roll call vote occurs on guaranteeing 7 paid sick days to rail workers in America.”
In the meantime, semiconductor chips, chemicals, and agricultural products, among others are finding their way to reliable truck transportation.
Sources: cnbc.com, politico.com
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