Longshoremen Strike Brings East and Gulf Coast Ports to Halt; Tech Helps Navigate Imminent Shipping Delays

Shortly after midnight, the International Longshoremen’s Association (ILA) carried through on threats to strike at ports up and down the East and Gulf Coast. Asking for a wage increase and ban on port automation, the union has brought trade to a standstill and once again thrust the volatility of the supply chain into the spotlight. 

The union and port ownership group (United States Maritime Alliance, or USMX) failed to reach agreement before midnight on a new contract. Union officials rejected the USMX offer of nearly 50% wage hike over six years. The strike will disrupt trade in 36 ports up and down the East Coast and along the Gulf, including the 14 high traffic ports: Boston, New York, Philadelphia, Wilmington, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, New Orleans; Mobile, and Houston. These ports are responsible for processing 43-49% of the total containerized goods entering the U.S. annually. 

 

A one-week strike could cost the U.S. economy $3.78 billion, according to an analysis by The Conference Board, and cause supply chain slowdowns through mid-November ¹. In all, the ports impacted handle $3 trillion annually in U.S. annual international trade.

Nick Schmitt, Senior Director Product Management, Infor Nexus Visibility Solutions, calls this strike another disruption in a long series of supply chain disruptions bombarding supply chain professionals. “The volatility and uncertainty that is present in the supply chain today is staggering. Between extreme weather events, geo-political conflicts, and labor issues such as this strike, professionals are continuously experiencing escalated risk,” he says.

He quickly adds, though, that there is a silver lining to this cloud. “Many supply chain professionals have come to expect disruption and have put response mechanisms in place. Some shippers that were monitoring supply chain news heard the rumblings of a potential strike and were able to make shifts. Buyers with modern supply chain solutions with forecasting abilities in place could reroute shipments to other ports,” he says.

Nearly $14 billion in goods arrived last week in a chaotic rush to beat a shutdown, according to CNBC ². On Friday alone $2.7 billion in trade arrived on the East Coast and Gulf Coast. The huge single-day volume reflects the scramble of importers and logistics partners trying to clear as many shipping containers through the ports as possible before the shutdown. The strike could be devastating to retailors who are stocking for holiday selling seasons. For ships carrying perishables extended delays could be disastrous.

CNBC reports that on average, it takes one week to clear out one day of a port closure ³. A lengthy shutdown could cause serious supply chain issues. During the months leading to the deadline many of the big retail players rushed in Halloween and Christmas merchandise early attempting to avoid strike-related disruptions – while incurring extra shipping and storage costs.

“Advanced knowledge of impending roadblocks allows buyers to examine options and adjust the shipping routes, carriers, and ports they select.  Additionally, an end-to-end visibility solution also enables them to see the impact of delays and alternative sources of product that can be transferred, re-routed, or expedited to prevent shortages,” says Schmitt. “With Infor Nexus Control Center, our customers can intelligently compare options and shift orders as needed with the ability to collaborate and execute decisions from the platform with supply chain partners,” he adds. 

Because the solution provides visibility across plans, orders, shipments and suppliers, the company can take advantage of wider insights. Perhaps goods can be shipped from another location or a different supplier, to supplement inventory.

“We are providing our customers with the insights they need to help them best navigate the situation, with real-time tracking of vessels and containers as they move through ports along with network insights for context on the broader impact” says Heidi Benko, VP Product Marketing & Strategy, Infor Nexus. 

The strike is a reminder of the high-stakes events that can hit a supply chain organization, causing havoc. While advanced software won’t settle labor negotiations, it will help companies cope with the delays, helping them to visualize orders impacted, anticipate the costs of rerouting goods, and quickly execute changes. With one end-to-end platform and a complete ecosystem in place, organizations can sense and respond with greater efficiency. 

About Infor Nexus

Infor Nexus provides intelligent, end-to-end visibility across the supply chain combined with global network insights. The single, unified view allows companies to see the impact of disruptions, have a broader view of response options, and then collaborate directly with partners to execute decisions. Learn more about Infor Nexus here.