Joe Biden just bought the country's food supply a little bit more time by signing an executive order to keep America's railroads running for another month or two. However, there is still a pretty good chance that negotiations between rail workers and their unions will sour during this time, driving America's 140,000-mile rail network to a screeching halt come harvest time.
"What I'm hearing from our members is fewer equipment issues," said Mike Seyfert, president and CEO of the National Feed and Grain Association (NFGA), following Biden's action. "The equipment and engines don't seem to be breaking down, but the amount of time it's taken to get the trains and the reliability of receiving them have."
In case you missed it, America's 57,000 some-odd rail workers had planned to walk off the job on July 18 in protest of low wages and poor working conditions. Biden intervened by signing an executive order that prohibits a strike and requires a 30-day "cooling period" for the two sides to come up with a solution.
During that 30-day cooling period, a Biden-appointed Presidential Emergency Board will investigate the dispute and come up with recommendations for a settlement. After that, the railroads have another 30 days maximum to either accept or reject the proposal.
What this means is that, should the negotiations fail during this time, America's rail lines will basically close up shop around September 18, which is right smack-dab in the middle of harvest season in North America.
"It seems to be most severe right now in the West, or for those who are trying to ship west on those lines that are going into the western part of the country," says Seyfert about how animal feed is not getting to where it needs to be in the American southwest due to the dispute.
"Either for feed purposes, processing purposes, or export purposes to the western side."
There are too many things happening all at the same time for supply chain woes to be a coincidence
One major company that is still having trouble getting feed amid ongoing rail problems not related to the strike – but that is among the many reasons for the proposed strike – is Foster Farms, the largest chicken producer in the western U.S.
According to reports, Foster Farms is having to pay exorbitant prices to truck in feed since there is not enough rail capacity due to worker shortages and other problems to get supplies from point A to point B.
AgWeb says that the issues railroads are facing center around labor and the amount of time that it takes to receive shipments via rail.
"The velocity to deliver trains is getting more and more difficult," says Ken Erikson, senior vice president at S&P Global Fuels, Chemicals and Resource Solutions Group. "You're having challenges with having enough locomotives in different locations."
"You have challenges with crews who may have been hit by weather, who may be hit by diversions, some of the rail crews timeout or they don't have enough locomotive engineers in the right position."
In Arizona, where some harvests are already occurring, rail cars are simply not showing up as scheduled. Consequently, grain shipments are not going as planned.
"We've got a whole harvest that's basically been received, and we haven't been able to ship anything," says Eric Wilkey of Arizona Grain, Inc.
"We never stopped the farmers from harvesting, so we have created some really large inventories and that has significant cash-flow impacts on us," Wilkey added, noting that rail cars were supposed to arrive back in early May, but only started trickling in during the first part of July about two months behind schedule.
The latest news about the rail debacle can be found at Collapse.news.
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