Legislators vote to avoid rail strike, but grocery industry argues more needs to be done to secure supply chains going forward

By Elizabeth Crawford

- Last updated on GMT

Source: Getty/Monty Rakusen
Source: Getty/Monty Rakusen

Related tags Supply chain Regulation Supply chain management

Uncharacteristically quick bipartisan action by Congress this week to pass a bill forcing an agreement between railroad workers and managers and avert a strike “spared this country a Christmas catastrophe in our grocery stores,” according to President Joe Biden, who praised legislators and promised to sign the bill into law as early as today.

The divisive bill finalizes a tentative agreement between railroad unions and managers that Biden helped broker earlier this fall, which included a 24% raise but no paid sick leave – a sticking point for many employees who often work in harsh conditions, such as snow storms.

The lack of paid sick leave prompted four of the 12 unions to reject the offer – heightening the risk of a strike beginning Dec. 9 which experts estimate would have shut down about 30% of the nation’s freight shipments – including many ingredients for packaged food and fresh produce, shortages of which could have inspired panic-buying akin to that of early in the pandemic.

Overriding the union negotiations and denying workers a chance at obtaining paid sick leave was not ideal, acknowledged many legislators who voted in favor of the bills and President Biden.

“I know that many in Congress shared my reluctance to override the union ratification procedures. But in this case, the consequences of a shutdown were just too great for working families all across the country,”​ Biden said.

Food industry leaders also agreed, arguing that adverting a strike was essential.

“A rail shutdown would have been devastating for the food industry and consumers alike, particularly over the busiest shopping season of the year, as a rail closure would have cost the US economy $2 billion per day,”​ said FMI – The Food Industry Association chief public policy officer Jennifer Hatcher.

As such, she praised Congress’ “swift bipartisan passage of legislation to avert a rail shutdown and keep the nation’s freight rail networks operational.”

‘We must position ourselves to better withstand future supply chain disruptions’

The Consumer Brands Association echoed this sentiment, but added that the near catastrophe underscores the need for longer-term solutions to bolster the supply chain.

“Going forward, the government must prioritize policies to expand visibility, enhance transportation performance, strengthen the manufacturing workforce, lower costs and reduce trade barriers,”​ CBA vice president of supply chain and logistics Tom Madrecki said.

He added: “We must position ourselves to better withstand future supply chain disruptions, so we can continue providing for consumers despite any challenge we face.”

A multi-faceted approach

According to CBA, this should include proactively establishing an inter-agency office of supply chain “to break down silos and compete globally,”​ and creating a congressional commission on critical supply chains to explore legislative opportunities to strengthen supply chains.

To better ensure stable transportation of goods, CBA argues Congress should adopt a “fix-it-first” and “right-size” approach to legislation and Department of Transportation guidance, and prioritize highway funding for maintenance, including an additional $2 billion annually for the National Highway Freight Program and $1.5 billion annually for the Infrastructure for Rebuilding America program -- at least.

CBA adds creating a “technology-driven, people focused transportation system”​ that includes a “truck air traffic control” data tool to assess capacity and connectivity across transporters in real time and adopt the deployment of autonomous vehicles, drones and other emerging technologies to potentially ease strain.

The trade group also advocates for strengthening the supply chain workforce and pipeline by offering support for education, including apprenticeships in skilled trades and supply chain professions, through public-private partnerships and via legislation that supports education tax credits and targeted visa reforms.

These and other suggestions are essential to long-term viability of freight shipping, of which the CPG industry accounts for one-fifth, argues​ CBA.

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