Retailers warn of ‘self-inflicted economic disaster’ after largest rail union rejects labor deal
By Matt Egan, CNN Business
The nation’s leading retailers warned Monday that Congress may need to step in to avert a devastating freight rail strike they fear could spoil food, interrupt the delivery of goods bought online and worsen inflation.
The Retail Industry Leaders Association, a trade group whose members include Walmart, Target, Best Buy, Home Depot and dozens of other brands, said a strike would cause an “enormous disruption to the flow of goods nationwide” and ripple through the supply chain and economy at large.
“Retailers urge policymakers to use every tool at their disposal to avoid a self-inflicted economic disaster,” the trade group said in a statement.
The warning was issued shortly after America’s largest rail union rejected a tentative labor deal with freight railroads, raising the risk of a crippling national freight rail strike.
“Fortunately, this year’s holiday gifts have already landed on store shelves,” the retail group said. “But an interruption to rail transportation does pose a significant challenge to getting items like perishable food products and e-commerce shipments delivered on time, and it will undoubtedly add to the inflationary pressures already hitting the US economy.
The Retail Industry Leaders Association said that if no agreement is reached by December 9, Congress must act quickly to codify the tentative agreement reached in September.
The National Retail Federation, the world’s largest retail trade group, similarly called on Congress to intervene “immediately” to avoid a “catastrophic shutdown” of the freight rail system.
A rail strike would come at a difficult time as the US economy is still grappling with high inflation, surging borrowing costs and elevated recession risks.
“This would be the worst possible time of year to have a disruption in rail freight and rail transportation,” Matthew Shay, CEO of the NRF, told CNN on Monday. “We’re hopeful they’ll get a resolution. If they don’t, we expect Congress to act very quickly to resolve this.”
CNN’s Vanessa Yurkevich contributed to this report.
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