Indiana News

Rail strike could hit Indiana hard

INDIANAPOLIS (WISH) — A looming rail strike could throw supply chains back into disarray following disruptions caused by the COVID-19 pandemic.

Unions representing freight workers cannot agree on a contract. The dispute centers around vacation and sick time, not pay. The unions have given the railroad companies until December to come to an agreement, but could strike sooner.

Kevin Brinegar, CEO of the Indiana Chamber, said, “We’ve got the highest concentration of people employed in manufacturing as a percentage of our overall workforce of any state in the country, so its arguable Indiana would be affected negatively by a rail strike much or more than any other state in the country.”

Steel, plastic, coal, grains and other raw materials are primarily transported by train since it is cheaper than shipping it on trucks.

A strike could lead to an increase in heating bills this winter.

Carl Briggs, a professor at IU Kelley School of Business, said, “$2 billion a day would be lost, but honestly that’s minor to what the real and lasting long term impact would be.”

Indiana has homed several automotive manufacturing plants, and many of those car parts and new cars are shipped by rail. A strike could lead to a shortage of vehicles.

Hoosier farmers would also be hit by a strike since their crops also travel by rail leading to an increase in food prices.

“With inflation, at abnormally high levels, and a few months ago at historic levels, and the supply chain issues, ect., this would be a real tipping point,” Brinegar said.

President Biden could order rail workers to back on the job while negotiations continue since rail freight is a vital part of the economy. But industry officials remain confident a deal can be worked out.