clearn.png
Friday January 27th, 2023 6:44PM

From carmakers to refiners, industries brace for rail strike

By The Associated Press
Related Articles
  Contact Editor

Car buyers might not get the vehicle they want on time, commuter rail lines could see service disrupted, and shipments from everything from oil to livestock feed could be snarled.

Those are just a few of the wide-ranging impacts a walkout by U.S. rail workers would have on the country’s industries and economy. A strike could happen if the railroads and unions can’t settle their differences before an early Friday walkout deadline.

Here’s how some industries are gauging the potential impacts and getting ready for the possible work stoppage.

___

AUTO INDUSTRY

Nearly all new vehicles that travel more than a couple hundred miles from the factory to their destination are shipped by rail because it’s more efficient, said Michael Robinet, an executive director for S&P Global Mobility. So it’s almost a certainty that new vehicles coming to the U.S. from Mexico or other countries will be delayed, he said.

“It’s not like there’s extra truck capacity to take all the vehicles that the railroads can’t carry,” Robinet said.

Automakers might be hampered in building vehicles, too, because some larger parts and raw materials are transported by rail. But Robinet said automakers will go to great lengths to get the parts to keep their factories running as much as possible.

Mike Austin, senior mobility analyst for Guidehouse Research, said the strike could make new vehicles even more scarce, driving prices up beyond current record levels. That could raise inflation “as other goods aren’t moving through the rails.”

Carlos Tavares, CEO of Stellantis, said Wednesday at the Detroit auto show that his company will wind up apologizing to customers because their orders may not arrive on time.

___

COMMUTING

Metra commuter rail service, which operates in the Chicago area, said Wednesday that it would suspend operations on four of its 11 lines on Friday if a work stoppage occurs. Some disruption on those lines would begin after rush hour Thursday night. In Minnesota, the operators of a commuter rail line that carries workers along a densely populated corridor from Minneapolis to northwestern suburbs and towns warned that service could be suspended as early as Friday.

In the Puget Sound region of Washington state, any strike would cancel the rail service until employees return to work, said David Jackson, a spokesman for the regional transit agency Sound Transit. Some Caltrain riders in the San Francisco Bay Area could be impacted by a rail strike, officials said.

The Maryland Transit Administration warned this week that a strike would mean the immediate suspension of service on two of its three MARC commuter rail lines.

Amtrak, meanwhile, said that starting Thursday, all its long-distance trains are canceled to avoid possible passenger disruptions while en route.

___

ENERGY

A strike could have a significant impact on the energy industry, and could hurt consumers who would likely end up paying more for gasoline, electricity and natural gas. Refineries might have to halt production if they can’t get the deliveries they need, or if they don’t have access to rail to ship gasoline.

No one wants to risk leaving flammable chemicals stranded on the railroad tracks if a strike occurs. That's why railroads began curtailing shipments of hazardous materials on Monday to protect that dangerous cargo.

Roughly 300,000 barrels of crude oil move by rail each day, which could supply about two mid-size refineries, according to AFPM. And about 5 million barrels of propane, representing a third of U.S. consumption, are moved by rail monthly, the group said.

Roughly 70% of ethanol produced in the U.S. is shipped by rail, and ethanol accounts for about a tenth of U.S. gasoline volume, according to S&P Global Commodity Insights. Nearly 75% of the coal moved to electric utilities in the first half of 2022 was moved by rail, the group said.

___

AGRICULTURE

Livestock producers could see problems almost immediately if shipments of feed abruptly ended, according to the National Grain and Feed Association.

Meat and poultry groups noted the reliance on rail for shipments of feed and called for a quick resolution of the rail dispute. Every week, the nation’s chicken industry receives about 27 million bushels of corn and 11 million bushels of soybean meal to feed chickens, said Tom Super, senior vice president of the National Chicken Council.

___

RETAIL

Experts say retailers have been shipping goods earlier in the season in recent months as a way to protect themselves from potential disruptions. But this buffer will only slightly minimize the impact from a railroad strike, which is brewing during the critical holiday shipping season, said Jess Dankert, vice president of supply chain at the Retail Industry Leaders Association, a retail trade group that counts more than 200 retailers like Best Buy as its members. She noted that retailers are already feeling the impact from the uncertainty as some freight carriers are limiting services.

Dankert noted that retailers, noticing a slowdown in shipments, are now making contingency plans like turning to trucks to pick up some of the slack and making plans to use some of the excess inventory that it has in its distribution centers.

But she noted that there are not enough trucks and drivers to meet their needs. That scarcity will only drive up costs and make inflation worse, she said.

“As we have seen in the past two and half years, if there is a breakdown anywhere along the supply chain, one link falters, you see that ripple effect pretty quickly and those effects just spread from there," Dankert said.

___

This story was first published on September 14, 2022. It was updated on September 15, 2022 to correct the spelling of Jess Dankert.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Business, AP Online - Georgia News, AP Business - Economy, AP Business - Industries, AP Business - Utilities
© Copyright 2023 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
One union rejects deal days ahead of rail strike deadline
Members of one union are rejecting a tentative deal with the largest U.S. freight railroads while three other unions remained at the bargaining table just days ahead of a national strike deadline
3:38PM ( 9 minutes ago )
From carmakers to refiners, industries brace for rail strike
Carmakers say buyers might not get the vehicle they want on time, commuter rail lines could see service disrupted, and shipments from everything from oil to livestock feed could be disrupted
3:37PM ( 11 minutes ago )
Six detainee deaths in St. Louis prompt investigation demand
Civil rights advocates in St. Louis are demanding an investigation into the conditions at the city jail, where six detainees have died since April
3:30PM ( 17 minutes ago )
Associated Press (AP)
Gov't OKs nearly $190M in bids from offshore oil lease sale
The U.S. government has accepted nearly $190 million in bids from an offshore oil and gas lease sale that was held nearly a year ago but rejected by a federal judge
2:49PM ( 59 minutes ago )
California sues Amazon, alleging antitrust law violations
California is suing Amazon, accusing the company of violating the state’s antitrust laws by stifling competition and engaging in practices that push sellers to maintain higher prices on products on other sites
2:10PM ( 1 hour ago )
EXPLAINER: Rail strike would impact consumers, businesses
A strike by railroad workers would have wide-ranging impact on consumers, commuters and businesses
2:09PM ( 1 hour ago )
AP Business
Petrino comes full-circle as Missouri State visits Arkansas
Bobby Petrino is 61 these days
1:56PM ( 1 hour ago )
SEC full of tight-end talent, led by Bell, Bowers, Trigg
It’s difficult to truly gauge the Southeastern Conference’s tight-end talent through two weeks of the season
11:27AM ( 4 hours ago )
Authorities say a rail strike would be an "economic disaster"
Freight railroads and their unions are facing increasing pressure from business groups and the White House to settle their contract dispute
6:00AM ( 9 hours ago )
AP Online - Georgia News
US wholesale inflation declines in August to still-high 8.7%
Inflation at the wholesale level jumped 8.7% in August from a year earlier, a slowdown from July yet still a painfully high level that suggests prices will keep spiking for months to come
10:24AM ( 5 hours ago )
Stocks waver on Wall Street after worst sell-off in years
Wall Street is steadying itself after tumbling to its worst day in two years on fears about higher interest rates and the recession they could create
9:40AM ( 6 hours ago )
EU moves to ban products made with forced labor
The European Union has unveiled plans to ban products made with forced labor from the 27-nation bloc’s markets
8:27AM ( 7 hours ago )
AP Business - Economy
Pakistani premier promises compensation for flood victims
Pakistan’s prime minister says his government will ensure people are compensated for homes lost to the country's worst-ever floods, which have killed 1,481 people since mid-June
9:48AM ( 6 hours ago )
Jim Beam outlines expansion to ramp up bourbon production
Jim Beam plans to ramp up bourbon production at its largest Kentucky distillery
9:12AM ( 6 hours ago )
Energy crisis: EU chief wants to tap excess producer profits
European Commission President Ursula von der Leyen wants to cap the revenue of electricity producers that are making extraordinary profits because of the effects of the war in Ukraine and climate change
9:11AM ( 6 hours ago )
AP Business - Industries
German man convicted of murder after killing over mask rules
A German man has been convicted of murder and given a life sentence for fatally shooting a young gas station clerk following a dispute over face masks
9:01AM ( 1 day ago )
As data centers proliferate, neighbors knock the noise
Northern Virginia has established itself as the world's largest home for data centers
8:53AM ( 1 day ago )
Lebanon: Central Bank lifts all expensive fuel subsidies
The Lebanese Central Bank has lifted its remaining subsidies on fuel
9:38PM ( 1 day ago )
AP Business - Utilities
One union rejects deal days ahead of rail strike deadline
Members of one union are rejecting a tentative deal with the largest U.S. freight railroads while three other unions remained at the bargaining table just days ahead of a national strike deadline
3:38PM ( 9 minutes ago )
Six detainee deaths in St. Louis prompt investigation demand
Civil rights advocates in St. Louis are demanding an investigation into the conditions at the city jail, where six detainees have died since April
3:30PM ( 17 minutes ago )
Queen Elizabeth II lies in state after solemn procession
Queen Elizabeth II has left Buckingham Palace for the last time, her casket borne to Westminster Hall by a horse-drawn gun carriage
3:18PM ( 29 minutes ago )
Study: 1-in-5 U.S. adults bet money on sports in past year
A new surveys shows nearly one in five U.S. adults bet money on sports over the past year
3:15PM ( 33 minutes ago )
'Car guy' Biden touts electric vehicles at Detroit auto show
President Joe Biden spent a good portion of his day Wednesday showcasing his administration’s efforts to promote electric vehicles at the Detroit auto show
3:06PM ( 42 minutes ago )