That Could’ve Been Rail-y Bad


I hope everyone’s had a good week. The nice thing about the holiday season is we’re only a few more weeks away from some more vacation time…that is unless you’re a rail worker.

So, let’s talk about it, because congress just intervened to make sure the rail strike won’t happen, and everyone’s Christmas gifts will arrive on time.

Some Background

For the younger generation (of which a lot of y’all are) the railroads feel archaic. Trains have always been around, you never really see them, and you don’t know their importance until something like an impending rail strike is taking place.

But the older generation has seen the rail industry blossom from this,

to this,

and have a slightly better gauge about the rail industry’s inherent value.

Let’s Talk About That Inherent Value

Just to level set all of us, the rail industry accounts for 28% of the total U.S. freight movement, which breaks down to 1.7 trillion (yes, trillion with a T) tons of cargo. That’s 61 tons of goods per every American and $2 billion dollars of commodities being shipped every single day.

And if you remember my post earlier on shipping containers, the ones that aren’t left empty in the ports are put right on the trains and shipped across the country.

There are 5 main players in the U.S. rail industry that make up almost all the revenue (shown in that picture above):

  • BNSF: 35,000 employees & 32,500 rail miles
  • Union Pacific: 32, 124 employees & 32,100 rail miles
  • CSX Transportation: 25,000 employees & 20,000 rail miles
  • Canadian National: 24,000 employees & 20,000 rail miles
  • Norfolk Southern Railway: 20,200 employees & 21,300 rail miles

And no, Amtrak doesn’t count because it’s a passenger only train.

To summarize, we have ourselves a 5 headed behemoth generating $83.3 billion, employing 136,324, getting you your stuff on time (for the most part), and creating an industry so important that they had to put it on the Monopoly board.

So, yea a rail strike would make a big impact.

The Bigger Picture

Here’s how railroad stacks up against others in the transportation industry. Although declining compared to trucking, still a top 2 contributor.

But What Can Congress Do About the Strike?

As with many other occupations like mining, teaching, and Starbucks, the railroads are heavily unionized. The unions will often times try to negotiate better pay and working conditions on behalf of the employees.

In 1926, back when railroads were the primary transportation for goods, the Railway Labor Act was made to “limit the potential for railroad strikes to affect interstate commerce by hindering the public’s ability to procure goods”. And in some cases, these strikes are illegal if they will devastate the public.

That basically means that the President and Congress will step in before this has a huge effect on the economy.

And That’s What They Did

Basically, Biden and congress found some middle ground to avoid catastrophe. The railroad workers don’t think it does enough, but are still accepting it before the Republicans take control of the Congress come new year.

Republicans are typically less empathetic towards unions.

But even if this wasn’t the case, from what I read it doesn’t sound like the unions can do much about it after the president steps in.

You learn something every day.

Let’s have ourselves a weekend.

from, matt

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