What the rail strike will mean for Seattle shippers, sellers and buyers

With a national rail strike likely to begin after 9 p.m. Thursday, businesses and residents in Seattle and Washington are preparing to deal another blow to a supply chain that was only beginning to recover from the pandemic.

Some analysts believe the federal government will try to quickly end any strike by unions representing thousands of rail workers against the BNSF, Union Pacific and four other freight lines over wages and working conditions. The strike would halt almost all rail traffic in the United States.

But an extended walkout by engineers, conductors and other workers could have a massive economic impact on everything from East Washington agricultural exports and shipments of parts for Boeing airplanes to Seattle-area new car sales, regardless of local retailers. Whether the shelves are full or empty, say experts and businesses.

“Supermarkets are the ones I’m most concerned about, because supermarkets are still suffering from massive out-of-stock” said earlier in the pandemic, Jeff Greene, a retail analyst at Hoffman Strategy Group, which follows the Seattle market. Is.

The Northwest Grocery Association said member grocers were preparing for a potential strike and that “shoppers should not stock up” and “buy only what they need and leave the rest to their neighbors and friends,” according to a Wednesday statement. give”.

The threat strike is hitting human freight too: Amtrak has already canceled its Cascade trains as well as long-distance routes — among them the Seattle-to-Los Angeles Coast Starlight route and the Seattle-to-Chicago Empire The builder – because the routes use tracks owned by freight rail companies affected by the strike, a spokesman said on Wednesday.

And Sound Transit said Wednesday that it would cancel the Sounder commuter rail service between Everett, Lakewood and Seattle on Friday if the strike goes ahead.

Businesses are particularly concerned about the impact of the strike on other links in the supply chain.

Although rail accounts for barely a quarter of the country’s freight traffic, much of the rest of the supply chain, including ports, truck fleets and warehouses, would struggle to function without it.

“We won’t be able to pick up or leave [cargo] containers from the rail yard until the conductors return to work,” says Lisa Clark, an independent trucker who usually takes incoming shipments of beer from a soda rail yard to warehouses in Kent and Everett. “All my work Rails, so after this week, I’ll probably be at home.”

Given the potential malfunction, many desperate shippers may try to resupply rail cargo to truck transport. But such moves could quickly affect local and national trucking fleets, which already had smaller drivers, trailers and parts.

And even before COVID-19, the trucking industry lacked the capacity to take on more than a fraction of the rail volume. According to the Association of American Railroads, an industry group, about half a million additional trucks will now be needed to carry all of the freight carried by American railroads.

But even a small shift from rail to trucking can slow deliveries and drive up prices — even for shippers who typically use trucks. Brian Gonzalez with FC Bloxom & Co., a Seattle-based agricultural export firm, said, “We will end up paying more to ship products anywhere – if we can even get a trucker to move the product for us. were able.”

Gonzalez is concerned about “a cascading domino effect that would potentially cripple the entire supply chain in nightmares.”

An extended work stoppage could also bring backlogs of unusable cargo ships and mountains of 40-foot cargo containers that closed US ports including Seattle and Tacoma last year.

This could mean delays in imported products, like the ones many retailers are stocking up for the holidays.

It’s also potentially bad news for exporters—among them, many Washington farmers are now harvesting crops and preparing products to be shipped.

For Ellensburg-based Anderson Hay, the new backup at the port of Seattle could mean delays in getting cargo containers of hay aboard ships for foreign buyers, said Mark Anderson.

And because Anderson also ships a lot of hay to home buyers, primarily by rail, a strike “will set all that back,” said Anderson, who notes that the threat of a strike comes just as it did in the past. Years’ supply chain problems were beginning to go unresolved.

“It’s already a very fragile system trying to get back together,” Anderson said. Any new “interruption would be disastrous.”

Meanwhile, for consumers in the Seattle area, it may take a few days for any effects of the strike to show up in the form of a product outage, assuming the strike lasts longer.

A strike “could halt auto deliveries for all brands,” said Mitch Tramm with Gilchrist Chevrolet Buick GMC in Tacoma.

Clarke, the trucker, isn’t concerned about the immediate beer shortage: Local warehouses have plenty of suds on hand, but said that “if it goes ahead, it’ll be noticeable.”

One big uncertainty: the impact on grocery retailers, who often have limited on-site inventory storage and rely on steady deliveries to keep shelves full.

The grocery association statement said a national strike would affect the supply chain of its grocers “based on their reliance on rail compared to trucks”, but an association official acknowledged that the strike’s potential spillover effects on trucking. “There is a reasonable concern that all are currently being assessed.”

But like nearly every other business locked in the supply chain, grocery stores and other retailers are challenged with knowing how to prepare for a strike, the imminent and duration of which is unknown, retail analyst Green says.

While stores will be eager to avoid any new “out-of-stocks” because that in itself creates panic,” Green said, “my gut is they don’t really know what to expect.”

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