Firms in State Draw Up Plans for a Rail Strike : Transportation: Many companies are set to shift to trucks. But that would mean higher prices to consumers for some goods.

California companies heavily dependent on railroads to deliver raw materials and finished products are greeting the potential problems from a rail strike with trepidation and some contingency plans.

At Farmer John Products in Los Angeles, where 6,000 live hogs are delivered by rail each day for slaughter and processing, company representatives got on the telephone Monday morning to change their transportation plans.

“We get about 30% of our delivery of hogs via railroad,” said Bernard Clougherty, company owner. “Now that we have an idea that there’s going to be a strike, we have transferred the hogs to trucks. (The strike) will have no effect at all.”

Talks broke up late Tuesday and the midnight deadline passed with no new bargaining sessions scheduled. Several unions set the strike for 7 a.m. local time.

Nationwide, food, paper, lumber, coal and automotive products are the most heavily dependent on rail deliveries, and California is not much different. If a strike lasts long enough, costs to consumers could go up as manufacturers switch from rail to costlier trucking to transport materials and finished products.

George Higi, branch manager for wood products company Georgia-Pacific Corp.’s distribution center in Anaheim, said supplies there will last about five days. After that, he said, “it could get ugly.”

For agriculture, an April strike would hamper operations somewhat, but a July strike would be much more devastating, said Mike Henry, spokesman for the California Farm Bureau Federation. Some California produce, such as carrots and potatoes, rely on railroads. Fortunately for them, the heavy harvest season has not yet begun.

“We’re just getting into the early harvest for many crops,” Henry said. “For fruits and vegetables leaving California . . . 80% goes by truck and the rest by rail.”

The cattle, dairy and poultry industries are more dependent on rail than produce, Henry said, because such operations rely on grain shipped in from the Midwest to feed their livestock.

Poultrymens Cooperative Assn. in Atascadero, which processes feed grain mixtures for poultry growers, is already feeling the effects. Susan Traglia, the company’s commodity buyer, said her firm ships most of its milo and corn from Oklahoma and Texas and soybean meal from Illinois.

“If the rail stops, and I can’t get anything, everything will be shipped in by truck from the Central Valley,” Traglia said. “My price is going to go up.”

At the Port of Los Angeles, 50% of the cargo that arrives or departs by ship is handled by rail carriers, which transport it throughout the country, said Chuck Ellis, port spokesman. What that means is a possible logistic nightmare. And the port has been working with customers to arrange storage or trucking facilities if a strike occurs.

“The duration of the strike will determine the severity,” Ellis said. “We are in the process of helping our shippers find other means, available trucks and also locating space to store cargo that will be slower in moving.”

Storage is costly, though, to keep the port from becoming a “parking lot,” Ellis said. But some exceptions will be made to keep strike-caused storage from becoming too much of a hardship.

Georgia Pacific’s Higi said his company supplies lumber to furniture makers, home builders and other customers in Orange County. The Anaheim operation receives daily lumber shipments that fill up to four rail cars.

“If this had hit 1 1/2 years ago, it wouldn’t have been as severe,” Higi said. “Because of the recession, we’re working on reduced inventories. And we’re beginning, just recently, to see increased (building) activity.”

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