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INDUSTRIAL ACTION USA RAIL

Class 1 Railroads are preparing for shut down of intermodal rail services over the remainder  of the week as a result of strike action intended to commence Friday 17th September by two major unions servicing the railroads.         

Deals have been finalized with 10 of the 12 rail unions however the remaining two have yet to be finalized . The Brotherhood of Locomotive Engineers and Trainmen(BLET) and International Association of Sheet Metal Air Rail and Transportation workers (SMART-TD) are the largest unions with approx. 90,000 rail workers.

The dispute relates to work conditions rather than salaries e.g. strict attendance, sick leave  and penalties for missing work.

Class 1 rail roads are the largest rail systems in the USA operating  intermodal services on long haul routes to and from  USA ports e.g.  Chicago, Dallas, Memphis etc.

There are 7 Class 1 rail road operators BNSF, Canadian National Railway , Canadian Pacific, CSX , Kansas City Southern , Union Pacific and Norfolk Southern.

Norfolk Southern whose partners include shipping lines Ocean Network Express (ONE) , ZIM, OOCL and Hapag Lloyd have announced they will stop accepting international bookings as of noon Wednesday 15th Sept.   BNSF has advised it will not accept refrigerated containers from noon on the 15th.

Various levels of government are trying to resolve prior to strike action on Friday.

The rail system in the USA plays a significant part in cargo movement with on average over 40,000 containers moving on rail each day, 50% international and 50% domestic.

It’s very disappointing because there were signs in the last weeks of some slight improvement in the rail system with limitations on export movements being lifted in some  mid-west hubs e.g. Louisville.

Strike action will impact on all modes of Seafreight originating inland. Obviously FCL movements into and out of ports will be effected as will LCL that is consolidated in depots within in the USA e.g. Chicago, Detroit etc.

Cargo will need to move into the road system and that will obviously put demand into that system. Some of the major container trucking operators have indicated that they would not be able to take on new bookings at short notice. The spot rate trucking market will likely  be impacted with increases

Other options such as transloading i.e. unpack full containers and distribution through FTL loads to importers and the reverse for exporters would be available.

Shipping lines are advising that chassis shortages are still prevalent Dallas, Chicago , Houston and other mid-west locations.

We will provide updates as they become known.