A looming rail strike would devastate the chemicals industry, hindering the transport of $2.8 billion in cargo per week, according to The American Chemistry Council (ACC).
CNBC reports that a labor deal is currently being negotiated between rail companies and unions, and if they can't agree by December, there will be a rail strike beginning December 5. This could pose a massive problem for the U.S. chemical manufacturing industry, as it's one of freight rail's biggest customers – an estimated 33,000 carloads of material is shipped per week.
An analysis from the ACC reports that a month-long strike could cause losses upwards of $160 billion – equivalent to one whole percentage point of gross domestic product (GDP).
The ACC is comprised of companies like Exxon-Mobil, Eli Lilly, Dupont, Dow Chemicals, 3M, and BP. The substances these companies produce are some of the most sensitive cargo freight rail companies transport, and securing those chemicals in the event of a work stoppage is the ACC's top priority. In September, the ACC released strike preparation plans that would guarantee substances like chlorine or fluoride for drinking water would be accounted for up to seven days before the strike.
A strike is ultimately in the railroad's hands, as they've been tasked to ratify a deal between workers that was recommended by U.S. President Joe Biden's Presidential Emergency Board. The two largest unions at play are the Brotherhood of Locomotive Engineers and Trainmen (BLET), which voted to ratify the deal, and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD), which rejected it. One other union, the International Brotherhood of Boilermakers, has already rejected the labor deal but is open to additional negotiations.
"The ball is now in the railroads' court. Let's see what they do. They can settle this at the bargaining table," SMART-TD President Jeremy Ferguson said in a statement. "This can all be settled through negotiations and without a strike."