As if there weren’t enough business disruptions for US Supply Chains, contract negotiations for the International Longshore & Warehouse Union (ILWU), the labor union responsible for West Coast port operations, are slated to begin this spring in the hopes of reaching an agreement in time for the July 1, 2022 current contract deadline.
As someone who has followed these labor negotiations for generations, this year’s negotiation is sure to be a contentious one with all of the issues that are on table from both sides of the fence.
Many experts anticipate that this year’s ILWU negotiations will result in either a labor strike or slowdowns at the Southern California ports as well as other US and Canadian West Coast ports. We also believe that there could be “sympathy” slowdowns and work stoppages at other US and Canadian ports if negotiations become hostile. The whole labor negotiation outlook, coupled with ongoing port congestion issues, vessel backlogs, equipment and labor shortages, as well as the newly added global trade uncertainty as a result of Russia’s invasion of Ukraine, will ultimately result in highly significant delays to global shipments, increased disruptions for supply chains around the world, and certainly much higher shipping and logistics costs.
To minimize the potential impact of these global supply chain disruptions and to safeguard supply chains, we highly recommend that US businesses immediately begin working with their logistics consultants and service providers to plan whatever alternative solutions may be available, just in case. And, as we have been speaking about for quite some time, is now the time for real serious discussions about Reshoring and Near Shoring alternatives. Well, if not now, then when!
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