The threat of a freight rail strike has the American Chemistry Council (ACC) calling on the White House and Congress to act quickly to keep vital chemical shipments moving to avoid a massive blow to a fragile U.S. economy.
"Chemical manufacturers are one of the first industries that will be impacted as railroads start restricting service up to a week before a threatened strike," says Chris Jahn, ACC's president and CEO, in a press release. "Freight rail transportation is vital for transporting chemicals critical to everyday life, including water treatment, energy production and food production. Shutting down chemical shipments by rail would quickly send shockwaves that would be felt through the entire economy and households across the country."
To prepare for a shutdown, railroads stop accepting "security sensitive shipments" – including certain chemicals – well in advance of a strike. Many chemical facilities would be forced to curtail production or shut down within the first week of a rail service embargo, according to the ACC release.
According to an economic analysis conducted by ACC, the impact of a potential strike would be felt almost immediately in terms of business shutdowns, scarcity of materials and goods, and lost economic activity. According to the analysis, a strike lasting one month would likely put a major chill on several leading economic indicators through the first half of 2023.
"A rail strike could shove the economy out of recovery mode and into a recession," says Martha Moore, ACC's chief economist. "A prolonged strike would have an exponential effect for each additional month and drag the country into a potential recession much faster."
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