Rail Strike Would Cost Economy Billions and Sour Holiday Shopping Season 

The Retail Industry Leaders Association (RILA) called on President Barack Obama to step in to avert a work stoppage that would disrupt retail supply chains during the holiday shopping season and well into 2012.

A breakdown in negotiations between the National Railway Labor Conference and railroad negotiators could lead to a nationwide shutdown on December 6. Estimates suggest that a national railroad work stoppage would cost the U.S. economy $2 billion per day.

A railroad work stoppage would have a dramatic effect on the holiday shopping season and the broader economy. Freight rail is crucial to the timely movement of goods. The retail industry relies heavily on freight railroads to move goods from ports to distribution centers and stores. A potential disruption in that link would be destructive to the retail industry’s ability to deliver their goods to stores in time to meet holiday shopping demand.

In a letter sent today to President Obama RILA President Sandy Kennedy said:

“A national railroad shutdown would force retailers to shift the delivery of their goods to trucks, increasing costs, time of delivery and congestion on our nations already crowded roadways. This means that the Christmas shopping season could be severely affected as products destined for stores sit idle at ports or in traffic. In fact, as the deadline approaches, the threat alone of such shutdown will force retailers to make changes to their supply chains, changes that could linger into 2012. According to some estimates a nationwide railroad strike could cost the U.S. economy $2 billion per day.”

Congress can impose the terms recommended by the Obama Administration’s Presidential Emergency Board on both rail management and labor.

Specifically, RILA urged President Obama to engage and urge Congress to impose the settlement proposed by the Presidential Emergency Board before a work stoppage damages the economy.

“We ask that you put the weight of the White House behind resolving this dispute and urge Congress to impose the PEB settlement before a work stoppage hurts the broader economy,” said Kennedy.

Yesterday, RILA made a similar plea to House and Senate leaders.

RILA welcomed the introduction of legislation in the U.S. Senate and House of Representatives today that would extend the “cooling-off period” for negotiations, which if passed and signed into law before December 6 would provide temporary relief. However, RILA will continue to press for a final resolution to the matter that would give retailers to plan shipments into the New Year.

The full text of the letter is below.

RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad

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December 1, 2011

President Barack Obama
The White House
Washington, DC 20500

Dear President Obama:

On behalf of the Retail Industry Leaders Association (RILA), I write to ask for your leadership to prevent a nationwide rail service shutdown next week and avert this avoidable economic catastrophe. This potential disruption would be devastating to the retail industry as it would disrupt the flow of goods during this critical time, resulting in lost sales, outraged customers and undermining what appears to be the strongest holiday shopping season since the recession began.

A national railroad shutdown would force retailers to shift the delivery of their goods to trucks, increasing costs, time of delivery and congestion on our nations already crowded roadways. This means that the Christmas shopping season could be severely affected as products destined for stores sit idle at ports or in traffic. In fact, as the deadline approaches, the threat alone of such shutdown will force retailers to make changes to their supply chains, changes that could linger into 2012. According to some estimates a nationwide railroad strike could cost the U.S. economy $2 billion per day.

By way of background, RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

The retail industry relies on an efficient rail transportation system to move product to distribution facilities and stores every day of the year. Freight rail is crucial to the efficient and timely movement of goods. Any potential disruptions in that link would be destructive to the retail industry’s ability to deliver their goods in a “just in time” fashion.

The best course of action is for Congress to impose the Presidential Emergency Board’s recommended settlement. We ask that you put the weight of the White House behind resolving this dispute and urge Congress to impose the PEB settlement before a work stoppage hurts the broader economy.

Sincerely,