An averted strike and logistics' critical role

The threat of a rail shutdown underlined the value of logistics to a smoothly functioning economy. But it shouldn't take a strike to get government's attention.

By Peter Bradley

a smoothly functioning economy. At the last minute, railroads and their engineers and dispatchers reached agreement on new labor contracts, averting a strike that could have shut down the railroads at the tail end of the most important shipping period of the year.

As Senior Editor Mark Solomon reports, those agreements meant that all 13 rail unions are under contract or close to final agreement, and the threat of a shutdown averted.

What's telling about that was not the agreements themselves, but the widespread concern the impending strike caused in business and government. President Obama appointed an emergency board to recommend ways to resolve the dispute. Rep. John Mica, chairman of the House Transportation and Infrastructure Committee, filed emergency legislation to implement those recommendations. Major trade groups like the National Industrial Transportation League, the Retail Industry Leaders Association, and the National Retail Federation all called for imposing a settlement. Both General Motors and Ford warned that a strike would cripple auto production.

Should a strike have occurred, it might have meant a mini-boom for long-haul truckers, but it's doubtful the trucking industry could have mustered anything close to the capacity needed to offset the loss of rail service. The consensus estimate seems to be that a strike would have cost the U.S. economy $2 billion a day at a time when the economic recovery is still precarious.

Any threat to major supply chains gets serious attention from business and government. When rail workers strike or port managers lock out workers, as happened during the peak season of 2002, it becomes abundantly clear to those who normally pay scant attention to logistics just how critical it is. Stalled goods mean a stalled economy.

Unfortunately, all too often, interest fades soon after each dispute reaches resolution. Thus, while some in Congress pound their desks and rant that a strike is unacceptable, we have seen little to indicate that Congress can reach any sort of agreement on addressing a national transportation infrastructure in sore need of maintenance and expansion. And failed bridges, congested highways, broken locks in waterways, and an antiquated air traffic control system disrupt the economy less dramatically but just as certainly as shutdowns caused by labor disputes. Perhaps Congress should address its own fiddling while the nation's roads crumble.

More articles by Peter Bradley

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