How Logistic Companies Can Lessen the Impacts of a Port Workers Strike

how a U.S. port strike could affect logistics companies

September 23, 2024

East and Gulf Coast ports face an October 1 strike as dockworkers fight for fair wages and benefits. With contract talks stalled, tensions rise as the current agreement expires September 30. A port workers’ strike in the U.S. could significantly disrupt business for logistics companies in several ways. Read on to learn how you may be affected and what steps you can take to mitigate the impact of a potential strike.

How your business may be impacted:

Supply Chain Delays: Cargo shipments through East and Gulf Coast ports would face delays, causing a ripple effect across the entire supply chain. Critical imports and exports could be stuck at ports, leading to shortages and missed delivery deadlines.

Increased Costs: With limited port operations, companies might need to reroute shipments to other ports or use alternative transportation methods, like air freight, which is more expensive. Demurrage and storage costs could also increase as goods wait to be processed.

Inventory Shortages: Retailers and manufacturers may experience inventory shortfalls, particularly in industries relying on just-in-time delivery, such as automotive and consumer electronics, affecting production lines and retail stock.

Congestion at Other Ports: A strike could shift traffic to West Coast or Canadian ports, creating congestion and further bottlenecks in those regions.

Labor Market Tensions: The strike could spark similar labor actions in other sectors of logistics and transportation, further complicating the movement of goods.

Economic Impact: A prolonged strike could hurt the broader economy, with U.S. businesses suffering from lost sales and higher costs, potentially leading to inflationary pressures.

What you can do to lessen the effect of a port workers strike:

Diversify Shipping Routes: Reroute shipments to West Coast, Gulf Coast, or Canadian ports that may not be affected by the strike. Use inland ports or intermodal hubs to reduce reliance on coastal shipping.

Increase Inventory Levels: Stock up on critical supplies before the strike to avoid shortages. Companies can build up buffer inventories, especially for time-sensitive or high-demand products. Warehouse goods near alternative shipping locations to ensure quicker access.

Secure Alternative Transport: Negotiate contracts with rail, trucking, or air freight providers to handle the overflow of goods that can’t go through affected ports. Book capacity early to avoid last-minute cost hikes as demand increases for alternative transport options.

Communicate with Customers: Inform customers about possible delays or disruptions and adjust expectations around delivery times. Offer flexible delivery options or alternative supply chain solutions to maintain customer satisfaction.

Develop Contingency Plans: Identify secondary suppliers that can ship from different regions or use alternative ports. Plan for extended delays by identifying critical operations that might be impacted and finding workarounds.

Monitor Strike Developments: Stay updated on labor negotiations and potential resolutions to the strike. React quickly to any updates or changes in the situation.

Collaborate with Supply Chain Partners: Work closely with suppliers and freight forwarders to coordinate shipments and manage disruptions. Pool resources with other companies or use third-party logistics providers to find creative solutions for moving goods.

By being proactive and developing alternative strategies, you can minimize the impact of a potential port workers’ strike.

Call CURA now to discuss alternative transport options and keep your supply chain running smoothly.