US Rail Strike Averted, Truckload Capacity Jumps
A potential U.S. rail strike was averted last week when labor unions and railroads reached a tentative agreement, facilitated by President Joe Biden's administration. But the situation underscored the fragility of the economy and supply chains.
The announcement made by Labor Secretary Marty Walsh states if unions accept the deal, workers will get more flexible attendance policies and a 24% pay raise. Walsh's contract represents 115,000 workers and railroads. If rail workers decided to strike, it would have cost the economy $2 billion per day and froze 30% of U.S. cargo shipments, reports Reuters.
But even with the strike averted, some minor disruptions still occurred. Ship requests for truckload capacity jumped 16% over the average level of August this past week out of the Ontario market in Southern California, according to a report from Freight Waves. The increased demand in truckload capacity will continue to slow the transportation of consumer goods.
"While most do not have a full grasp of what this means in detail, it could have brought increasing demand for truckload capacity out of the nation's largest outbound freight center—and it may have achieved this effect," the article reads.