Louisville economist says possible railroad strike could impact prices and supplies | Business


LOUISVILLE, Ky. (WDRB) — A Friday deadline looms for railroad companies and their unions to reach a contract or face a possible strike on Friday.

The coalition negotiating on behalf of the nation’s biggest freight railroads — including Union Pacific, CSX, Norfolk Southern, BNSF and Kansas City Southern — has announced eight of the 13 tentative agreements needed to avert a strike by some 115,000 rail workers.

The Association of American Railroads trade group put out a report last week estimating that shutting down the railroads would cost the economy $2 billion a day.

“At least in the short run we’ll see these price increases and we’re already hurting from shortages of supplies,” said Steve Gohmann, an economics professor at the University of Louisville. “This will make things worse.”

Gohmann and other economists believe that the length of the strike will determine how much consumers are impacted.

Despite rail carrying the second largest amount of freight in the U.S. every year, experts believe the economy is at a state when the workers have some leverage.

“We’ve got this big demand for workers, and not a lot of workers available,” Gohmann said. “This makes it easier for the union to go on strike because there’s no substitutes to the railroad workers.”

Some railroads said they would begin curtailing shipments of hazardous materials and some other goods Monday in advance of a possible work stoppage at the end of the week. That would ensure that containers of those dangerous goods aren’t left stranded along the tracks.

The federal law governing railroad contract talks won’t allow a strike or lockout before Friday.

The heads of the Sheet Metal, Air, Rail and Transportation Workers — Transportation Division union that represents conductors, and the Brotherhood of Locomotive Engineers and Trainmen union that represents engineers, criticized that decision as a move to increase pressure on shippers and Congress to intervene.

Experts are expecting Congress to step in at some point.

“Maybe we end up with a strike for a couple of days and congress intervenes and then the impact is not huge,” Gohmann said.

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Copyright 2022 WDRB Media. The Associated Press contributed to this report. All Rights Reserved.

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