14Sep

The national news outlets have been reporting on a potential strike by the railroad unions, which will be based on a deadline of September 16, 12:01AM.

We have already seen a slowdown in Amtrak Passenger services and routes. Amtrak is not part of this union, but it does use the Rails that are controlled by the Railroad union. Currently, Certain commodities with short shelf life and hazardous materials are being diverted to our highways, to avoid the possibility of being stranded on the tracks in an unknown destination.

What could this mean for the print and paper industry?

Many LTL carriers use some sort of rail services. Between 30% and 40% of all Over the Road Shipments (OTR) use rail. We have all experienced driver shortages that have led to missed pick-up and delivery dates. Now imagine 30-40% more cargo pushed into the Trucking pipeline. This would lead to an extended period of delays in both pick-up and delivery as the freight industry can not manage this about of volume increase, in such a short period of time.

The second significant effect will be the increase in freight pricing that will be justified by the high demand, low supply model. This is at the same time we are already experiencing record high freight costs for the same reason as well as the high fuel costs.

I know we all experience the net result of freight costs at the grocery store. Nationally we are seeing upwards of a 17% increase in food costs currently. I cannot imagine what this amount will be if this strike happens.

In summary, be prepared for increased freight costs and shipment delays, should the railroad union vote in favor of a strike.

For comments or concerns, contact Brandon Kent at bkent@telemarkcorp.com

****As of today, 9/15/22, it appears that we will be spared the repercussions of a rail strike!

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