Food & Beverage Impact from the Rail Strike

The Lempert Report
December 07, 2022

Phil: So, Sally, let's talk about this rail strike. That didn't happen. What's the impact here for food and beverages? 

Sally: Well, what we're talking about here and we all kind of know what happened is that there was this, I think I believe a 96 year old law that actually came into play here where Congress could get involved with, settling this rail strike, which really adds up to it being very, very desperate measures to be taken because we know that President Biden has called himself a pro-labor president. So it was a situation where it was going to really, really affect people, affect our economy. And so the government stepped in. Now what they did was they looked at these conditions that these rail strikers were complaining about, and I think that's what's really important of what we need to talk about is what their grievances were. And some of that was met in Congress's mediation of the agreement and some of them were not. 

Sally: But what is important, I think, to look at here, and I'd love to hear your take on this Phil, is how this translates to all of our industries, but particularly our food industry. When we think about the strikes that took place last year at some really big food companies like PepsiCo, Frito Lay, we need to think about what our workers need and are we taking care of them? We have a labor shortage already that we're dealing with. We need people to work. They, we need them to want to come to work. We need them to be happy about their jobs. So what can we, as a food industry do to help make sure that we've got people packing those products and getting them ready to ship? 

Phil: And also, let's not forget at retail, to have those, those people who are working at retail be happy as well. And it's really a, a double edged sword cause certainly that means increased costs, which gets passed onto the consumer with increased costs on our shelves that everybody is complaining about already. But also I'm really concerned that what we need to do and this congressional law, I guess, has been played about five or six times since the thirties, where the government has gotten involved and stopped a rail strike because rail is just so important. I think it's time to reimagine the food industry, as we've talked about dozens of times before, that we can't have factories, you know, far away from where the consumers are far away from where the retailers are. And we really, whether it's trucks, whether it's rail cars, we really need to build factories closer to where consumers are. 

Phil: Again, you know, the local movement has really been focused on, you know, not only helping local farmers, but also, you know, the fact that we get fresher foods. So maybe it's time to really rethink all of food and beverage to be local. We averted this strike, but there could be another one on trains, and we're back to the same problem.