September 15, 2022
Media Advisory: SIU prof can discuss averted rail strike, other supply chain issues
CARBONDALE, Ill. — Gregory D. DeYong, a Southern Illinois University Carbondale associate professor of operations management, is available for interviews about the already precarious supply chain and the impact of the tentative agreement approved early Thursday morning with unions representing more than 60,000 railroad employees averting a freight railroad strike that would have been a huge blow to the supply chain, according to the Association of American Railroads (AAR). The pact is still subject to ratification by the union membership, and the agreement doesn’t include paid sick leave, which is reportedly one of the sticking points, according to members. Friday was the deadline set for a strike vote.
DeYong has personal experience as well as professional knowledge in supply chain management. Before becoming a faculty member, he worked as an import/export manager where he was responsible for importing about $100 million in products annually. DeYong is currently working to establish a Center for Supply Chain Management and Logistics within the College of Business and Analytics to encourage research and teaching in this important area. DeYong can be reached at gdeyong@business.siu.edu.
Officials say the strike would have idled about 7,000 freight trains a day run by CSX, Union Pacific, BNSF, Norfolk Southern, Kansas City Southern and other railroads. Already Amtrak and other passenger operations have been affected. Amtrak suspended several of its routes nationwide because its rail systems rely at least partly on tracks owned by the freight railroads and they are now working to the routes.
The U.S. economy would have lost about $2 billion every day trains weren’t moving, according to the AAR. For instance, one-third of U.S. grain exports travel by rail, so a disruption would worsen food shortages worldwide.
“This is harvest season, so in addition to grain exports, the domestic movement of grain would have been hampered. This is a recurring issue, but it was particularly troubling in 2014, when rail capacity was being used up by petroleum, so the inability to move train by rail was a major problem,” DeYong said. “Most of the grain supply chain depends upon the product moving quickly from farm to processor because there is limited storage along the way.”
In addition, officials say:
- About one-half of all U.S. fertilizer travels by trains and if it can’t reach farmers or if costs increase for getting it to them, it further increases food costs for consumers.
- More than 75% of vehicles get from factories to dealerships by train.
- One rail car can transport up to 2,000 UPS packages.
- An additional 467,000 long-haul trucks per day would be needed to help compensate for what is transported via rail.
In addition to the rail situation, the labor contract covering more than 22,000 port workers at 29 Pacific Coast sites stretching from California to Washington State expired July 1. According to news reports, about 40% of the nation’s imports are handled at these ports. Negotiations began in May between the Pacific Maritime Association and the International Longshore and Warehouse Union, but the parties have still failed to reach an agreement.
At this time, dock workers remain on the job. But when negotiations broke down in 2015, they stopped work for eight days, resulting in product shortages across the country and siphoning an estimated $8 billion from the Southern California economy alone. Then President Barack Obama sent his labor secretary to help establish a new pact in 2016. Subsequently, both sides agreed to a three-year extension of the contract in 2019, and they are now seeking a new contract for the first time since.
“I am very familiar with delays and labor disputes at that port,” DeYong said, noting that when he worked in the industry much of the product he handled came through the port at Long Beach, California.
Although there haven’t been work interruptions at this time, some shippers have routed cargo away from the West Coast, creating backups at ports elsewhere and driving up costs, DeYong noted.
As the holidays approach, supply chain concerns may crop up again, DeYong said.