Editor’s Notebook: Are We Looking At A Smooth Busy Season?
Written by David C. Lester, Editor-in-Chief
David C. Lester
ATLANTA –– FROM THE NOVEMBER 2024 ISSUE OF RT&S –– Labor agreement progress, a wary eye on the weather.
Railroaders know that we’re in the middle of our supply chain’s “busy season,” which is driven primarily by consumer spending on holiday gifts and other items that usually begins in earnest on November 15 and lasts through the end of the year. The “busy season” for the supply chain starts earlier, around late August or early September, and can run through the end of the year if consumer spending is high and replenishment of stocks is needed into December.
Class I railroads handle a great deal of these goods, as high-speed intermodal trains ply the rails between coasts and elsewhere, often from ports to population centers. Other than the storm damage from the two recent hurricanes, the physical plant of the nation’s railroads is in pretty good shape. Probably the line in the worst shape is one of the Norfolk Southern lines into Asheville that the railroad says will require several months to get back into service.
As far as we can tell, there is a threat of wildfires in the West and conditions developing in the Caribbean that could trigger a tropical storm or a hurricane. Other than those, the natural environment seems relatively calm. However, these are the conditions as they are in late October, as this is being written. We all know that something could pop up or conditions change in a matter of hours. Let’s hope the supply chain continues to function smoothly.
One bright spot has been the near daily appearance of stories reporting that various labor unions have either reached tentative agreements or have ratified agreements with the railroads. Therefore, it seems that the threat of a rail strike before the end of the year is low.
I’ve also been pleased with the increasing reference to rail labor as “craft colleagues” or “craft associates.” This seems a more respectful and appropriate way to refer to the rail workforce than “labor.” Moreover, the recently completed negotiations seem to have gone well, without protracted negotiations and market uncertainty over the threat of a strike. Even the very real threat of a prolonged International Longshoreman’s Association was resolved after a couple of days. A prolonged strike would have been catastrophic from a business point of view and would have had a measurable impact on economic activity for not only the busy season, but for the entirety of 2024.
Let’s hope that all the natural environment and the human environment remains stable to have a strong end-of-year. The October 19th –– 25th issue of the highly respected news magazine, The Economist, says that the American economy is the “envy of the world.” The magazine says “America has long married light-touch regulation with speedy and generous spending when a crisis hits. Although supersized stimulus during the pandemic fueled inflation, it has also ensured that America has grown by 10% since 2020, three times the rate of the G7. By contrast, stingier Germany is mired in recession for a second consecutive year.”
