We are all aware of the situation in ports around the world – major safeguards, sometimes up to hundreds of ships long, and the kind of general congestion that would make someone with a bad cold seem fine comparison. This situation could simply get worse before it gets better. On the west coast of the United States, a potential strike is brewing and could severely damage logistics, especially for goods from Asia. It’s not just the ports – railway workers threaten to strike as well, which could also exacerbate supply chain issues across the country.
While there have been promising signs that some of the threatened strikes may not happen, the possibility continues to cast a shadow over the entire supply chain profession. Two ports on the west coast alone bring more than 40% of the United States’ shipping container trade with Asia. This can have precarious outcomes for organizations that depend on resources or finished goods from the continent, as they could face shortages as their goods remain docked. As the world is still recovering from the effects of COVID-19 and dealing with current supply chain issues such as the global labor shortage and the war in Ukraine, social unrest could tip the scales. towards a global supply imbalance.
The news also heralds potential disaster, as 75% of all cargo entering West Coast ports is destined for retail. As the high demand of the holiday season approaches, organizations may not have the merchandise to meet it. This could lead to another explosion of inflation in the US economy as companies raise prices to meet their shortage.
The railway union strike also poses a significant risk to companies looking to ship goods across the country. Union disagreements with the property led to the possibility of 115,000 railway workers on strike – threatening a crisis affecting not only the transport of raw materials, but also crops and imported goods.
There may be a chance of resolution
This strike threat has not gone unnoticed – to quote a representative of the American petrochemical manufacturers group about the potential strike, “We want to avoid this at all costs, especially when we are in a precarious situation as our nation is now in some way in crisis with our current supply chain.” While there is the possibility of government intervention in the event of a strike, the potential for a downturn still exists, threatening businesses that may have inventory piling up in warehouses.
During the period when there may be a strike, organizations should begin taking steps to mitigate risks in their supply chains and seek alternatives for transporting their goods internationally or domestically. It’s safe to say, however, that the woes of the supply chain profession are never over – once one emergency seems over, another begins to emerge.