Letter Regarding Potential Rail Service Disruptions
Following is a statement and letter from LCA President and CEO Greg Bowser regarding the looming rail service disruptions:
“Freight rail labor strikes would have very dire consequences to not only our industry but our country as a whole. The flow of essential chemicals would come to a halt including chemicals used in water treatment facilities, which could impact drinking water, chemicals for crop protection & food production, electricity generation, and even automobile production. The United States exports roughly 13% of the world’s chemicals. With the current global supply chain crisis and the rising inflation rates, the added economic loss from a rail strike would exacerbate an already fragile economy and potentially put more American families out of jobs. Not to mention the impacts here at home. Louisiana is the second-largest chemical-producing state in the country and the industry generates roughly 51.99 billion in revenue each year. I urge Congress to work together to prevent a freight rail labor strike and I encourage our Louisiana delegation to protect working Louisiana families and work with their colleagues on a timely solution”
To Whom it May Concern:
On behalf of The Louisiana Chemical Association, I am writing to express concern about the threat of rail service disruptions if Congress does not act timely to address the pending freight rail labor strikes. With two of the country’s largest unions still in debate over ratification of agreements, waiting until the deadline of December 4th would lead to chemical rail shipments possibly being removed from service as early as tomorrow, November 29 – one week prior to the strike. This would cause devastating consequences to the chemical industry as a whole.
Over the past few years, the quality and reliability of rail service has eroded significantly due to deep cuts to the freight rail network, which has prolonged the supply chain crisis and hurt many businesses. On October 27, hundreds of associations wrote to the Biden Administration urging action on this issue to provide reliability and stability to the system.
If Congress fails to act to prevent a rail strike, the U.S. freight rail system would be brought to a standstill harming constituents across the country by stopping the flow of goods and materials that are critical to everyday life. Recent economic analysis shows that a strike lasting just one month would:
- Pull nearly $160 billion dollars out of the economy
- Trigger the loss of 700,000 jobs across multiple industries and economic sectors
- Spike inflation with a four percent increase to the Producer Price Index (PPI)
These shockwaves to the economy would fuel inflation and drive the country towards a recession. The flow of critical chemical products by rail would come to a halt resulting in potential negative impacts to crop protection & food production, electricity generation, and even automobile, semiconductor & steel production. Water treatment facilities that rely on routine delivery of chlorine and other treatment chemicals would be at risk of service interruptions, impacting the quality of the water we drink and the wastewater we return to the environment.
A prolonged strike could create more supply chain issues including empty shelves in stores, temporary closures at factories, and higher prices of various consumer goods. As you are aware, our state is a hub for the chemical industry and this rail strike could devastate our local economy. As a state that has been through numerous federally declared disasters over the last few years, an economic disaster such as this would hurt many Louisiana families that are still trying to recover.
I urge you to support legislation to help both parties reach a mutually agreeable solution to resolve this situation and prevent a complete breakdown to the rail network. Thank you for your continued service and dedication to our state.
CEO and President
Louisiana Chemical Association