Consumer Brands Association Urges Action to Stop National Freight Rail Service Shutdown

The Consumer Brands Association urged the White House and Congress for support in preventing a looming national freight rail service shutdown that would cost $2 billion in lost economic output a day.

Consumer Brands’ vice president of supply chain and logistics Tom Madrecki addressed a letter to President Joe Biden and congressional leaders, warning that if a labor agreement between freight railroads and their unions is not reached by the Sept. 16 deadline, a strike will devastate the nation’s already struggling supply chains.

“Our member companies depend on freight rail services every day to ensure the availability, affordability, and accessibility of essential products,” Madrecki said.

The New York Times reported that the industry failed to reach a contract agreement with two unions representing much of the workforce (57,000 conductors and engineers). A federally mandated 30-day “cooling off” period ends on Friday, opening the door to strikes and lockouts. Some freight companies have started to limit services.

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CNN reported that the White House is urgently discussing contingency plans, with agencies across the federal government working through how they could use federal authority to keep critical supply chains operational as labor talks continue to sit at an impasse.

Meanwhile, Consumer Brands advocated for voluntary adoption of Presidential Emergency Board (PEB) recommendations to resolve labor negotiations and the intervention of Congress if needed, said the association in a press release.

“If a voluntary agreement cannot be reached, Consumer Brands supports Congressional action to finalize negotiations based on the PEB recommendations and do what is in its authority to prevent service disruptions that will have a profound impact on the availability of critical products,” Madrecki continued.

With product availability, inflation, and cost challenges continuing to affect American consumers, the supply chains cannot afford another crisis in the form of a freight rail strike, warned CBA. “Even before the pandemic, the CPG industry expressed concern about declining rail performance, and we believe there are opportunities to both preserve business continuity amid labor talks and take a long-view approach to policies that will strategically improve our nation’s freight rail system,” added the letter.

The Association of American Railroads, a freight rail industry group, said that the carriers “are not planning a lockout on Friday if ongoing negotiations remain unresolved.