An influential retail industry group on Wednesday called for Congress to act and prevent the looming railroad strike, saying that the time for a strike “couldn’t be worse” ahead of the holiday shopping season.
“Freight rail is critical to the retail supply chain, and retailers of every size rely on it to move cargo every day,” National Retail Federation Chief Executive Matthew Shay said. “Retailers are deeply concerned about the situation and the impact that a disruption would have on business operations throughout the country.”
Unions and railroads continued negotiations on Wednesday ahead of a Friday deadline to avert a strike.
Railroad operators this week moved to curtail operations, impacting hazardous materials, fertilizers, grains and other loads, and the looming strike has affected Amtrak’s passenger service and some commuter train services as they share train tracks and rights of ways in several areas with freight operators.
The strike would come as retailers are still struggling to adjust inventories, which were out of whack due to the pandemic and supply-chain problems, and as inflation has some consumers pausing their shopping trips or seeking cheaper alternatives for the products they buy.
It also would coincide with the all-important holiday shopping season.
“The timing coincides directly with peak shipping season for the winter holidays, and a rail strike at this juncture would be just one more significant, inflationary shock to an economy that is already reeling from historically high inflation,” Shay said. “Smooth and stable operations on the rails is crucial as we enter the busy holiday season.”
“Should the negotiating parties fail to reach an agreement, Congress must act quickly to intervene and implement the Presidential Emergency Board’s recommendations to avoid a rail strike and a catastrophic shutdown of the freight rail system,” the CEO continued.
The SPDR S&P Retail ETF
is looking at losses of more than 4% so far this week, while the consumer discretionary-heavy Select Sector SPDR ETF
has fallen slightly over 2%. That compares with losses of 3% so far this week for the S&P 500 index