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The Fragile State of the U.S. Railways and How It Reflects the Need for Strong Leadership

November 2022
Peter Deragon
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It’s no secret that both the national and global supply chains have been in a state of disarray for the last few years. The pandemic was an understandably challenging event, and we’ve seen several other unforeseen economic woes in its wake.  

Some of these are directly impacting supply chain and logistics, such as ongoing concerns in the aviation industry. Others are tangential yet significant, like the impact of Russia’s invasion of Ukraine.  

And then there are the silent threats, the quiet-yet-deadly dangers that destabilize the supply chain and have the potential to take it completely off the rails. One of these current yet quiet concerns is the ongoing possibility of a strike by U.S. railway workers. 

The State of the U.S. Railroad System

In mid-September, reports came out that a labor deal had been struck between railway unions, freight companies, and the Biden administration. This came in reaction to a potential strike by disgruntled workers that had the potential to wreak havoc on this key element of the American supply chain.  

President Biden called the deal a “big win for America” and was optimistic about forging similar agreements in other areas of the U.S. economy. The remarks were premature, though, as the deal still required the approval of multiple union votes. As of late October, two of those votes had been cast by a pair of railroad unions, both of which failed to gain the approval of their respective groups. 

As of this writing, this leaves a pall not just over the railway industry but the supply chain as a whole. A strike remains very much in the cards and could take place as early as November 19th, just before the busy holiday season. 

The reaction to the threat of a shutdown, especially amid so many other ongoing crises, is palpable. Many leaders have already begun brushing up on contingency plans as they await the results of the current circumstances.  

The Canadian railway system faced a similar situation and was able to agree to last-minute arbitration earlier in the year. While that remains a possibility for this specific situation, it’s anything but clear. What’s worse is that there’s no guarantee that the railway (let alone shipping, aviation, and other sectors of supply chain and logistics) won’t face similar issues in the future. 

The Need for Strong Leadership in the Supply Chain 

The railroad crisis emphasizes something that we at Stanton Chase have always known to be true: you need strong leaders in place before a problem develops. 

Don’t misunderstand. Strong leadership won’t automatically mean you avoid all problems (although it will likely reduce the number of issues you face). The emphasis here is having a firm hand already on the tiller if and when a problem arises. A strong leader can take steps to address an unfolding situation well before it spirals into a larger catastrophe. 

Using the example of the railroad, one of the recurring issues on the managerial side of the argument is the failure of leadership to hear the workers. U.S. union members are currently pointing to a lack of sick pay as a clear issue, and one spokesperson summarized the pain point by saying, “The railroads consistently underestimate the frustration and anger of the workers. Workers can’t take it anymore.” 

U.S. union members are currently pointing to a lack of sick pay as a clear issue, and one spokesperson summarized the pain point by saying, “The railroads consistently underestimate the frustration and anger of the workers. Workers can’t take it anymore.” 

This is a problem that an insightful leader could address without the need for a strike or the public spectacle that it brings along with it. A strong C-suite should be able to hear feedback and communicate with employees. They should be able to address genuine concerns, like sick pay, while also maintaining productivity through setting standards, properly handling quiet quitters, and so on. Good leadership also maintains a universal perspective. This takes everything into account, from the daily concerns of employees to the larger big-picture direction of the company (and, in this case, the heavily-strained supply chain, too). 

Building Strong Leadership to Guide the Future 

As we wait for things to play out with the railroads, leaders across the fragile supply chain and logistics sector should sit up and pay attention. The need for strong, capable, and proactive executives has never been greater. This isn’t something companies can address overnight, either. It takes time to invest in a healthy leadership team, starting with hiring in the here and now

The need for strong, capable, and proactive executives has never been greater. 

At Stanton Chase’s Los Angeles office, we’re aware of how difficult it can be to find the right candidates for a C-suite position. That’s where an executive search firm can make a difference. Our veteran team of experienced recruiters has the right tools, network, and strategies already in place. We have a track record of finding and placing countless C-level executives in key positions across supply chain and logistics and continue to do so as our clients look for quality talent to reinforce their leadership teams. 

Supply chain and logistics continues to struggle with a growing list of ongoing challenges. As the situation unfolds, companies need to invest in the future now by building a strong and capable leadership team that can guide their enterprises, no matter what tests the future may hold. 

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