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This holiday season, the Amazon warehouse strikes represent yet another disruption to the supply chain. Labor disputes have become more common in 2023, suggesting that ongoing conflicts could lead to another challenging year for global shipping in 2025. The strikes, organized by Teamsters union members, coincide with the looming threat of potential strikes by dock workers at 36 ports along the U.S. East and Gulf Coast.
Mike Short, president of global forwarding at C.H. Robinson, pointed to a staggering 280% increase in strike activity this year, noting that the trend shows no signs of slowing. “We are already assisting shippers in preparing for a possible U.S. port strike come January,” Short added.
Industries heavily dependent on just-in-time inventory management, such as automotive and pharmaceuticals, are urged to activate contingency plans, especially in light of anticipated labor unrest in 2025.
The most significant potential for labor disruption looms in mid-January, with a critical deadline set for January 15. This date marks when U.S. ports and the International Longshoremen’s Association must reach an agreement regarding automation at the East and Gulf Coast ports. Negotiations have recently stalled, and President-elect Donald Trump has expressed his support for the union’s stance against automation.
As the January 15 deadline approaches, global shipping leader Maersk has advised clients to plan for the logistics of moving containers off terminals to prevent access issues should any terminal closures occur, especially with no extra time provided for last-minute cargo retrieval.
Navigating ‘Black Swan’ Events in Global Trade
The logistics sector has become all too familiar with “black swan” events, notably the COVID-19 pandemic, which severely disrupted global supply chains. The pandemic underscored the need for improved digital solutions that enable companies to track trade effectively, thereby addressing the lack of communication and data sharing that previously contributed to significant port congestion. Such technological advancements will remain pivotal in managing future trade disruptions.
In March 2022, Andrew Petrisin, Deputy Assistant Secretary for Multimodal Freight at the U.S. Department of Transportation, launched the Freight Logistics Optimization Works (FLOW) digital platform for enhanced supply chain monitoring. This platform has enlisted 86 partners from various sectors, including retailers, freight carriers, logistics providers, port operators, and trade associations, and is aimed at providing a comprehensive view of trade. It helps identify trends and assess strengths and vulnerabilities within the U.S. supply chain and infrastructure.
Currently, FLOW tracks 75% of all U.S. container imports and 80% of container terminal capacity. Its partners comprise major players such as MSC, Maersk, Hapag Lloyd, and significant retailers like Home Depot, Nike, Walmart, and Target, in addition to railroads and logistics firms like Union Pacific, BNSF, DHL, and FedEx.
The platform has proven instrumental in offering real-time port and inland network updates, facilitating responses to unexpected disruptions. For instance, data from FLOW helped stakeholders navigate changes in cargo flows following the Baltimore Bridge collapse and major world events, such as attacks in the Red Sea. The platform has also become a resource for monitoring potential inflationary spikes within the supply chain.
“This functions as a disruption response tool,” Petrisin remarked. “Some members are developing decision-making models to reposition inventory or shift cargo in response to observed congestion.”
The Future of DOT’s Data Initiatives Under a New Administration
Petrisin noted that the ocean freight data collected by FLOW currently extends approximately 40 days out, while purchase order data is available for 60 days, with aspirations for a 90-day forecast. This enhanced visibility aids logistics companies in better forecasting and decision-making, particularly during disruptive events.
While warehouse workers at Amazon locations in cities like New York, Atlanta, and San Francisco participate in what the Teamsters label the largest strike against the company, Petrisin clarified that the Department of Transportation does not directly intervene in these labor disputes.
“Our role is to ensure that America’s infrastructure remains competitive while advocating for fair worker compensation,” he stated. The ripple effect of these labor actions impacts the entire logistics network, influencing the warehousing sector and domestic manufacturing, prompting close monitoring by federal partners.
With the expected change in administration, there are concerns among logistics managers regarding the future of public-private partnerships such as FLOW. Despite a Republican-led appropriations bill proposing a budget for the DOT below President Biden’s requests, it notably allocates $5 million for a nationwide dashboard aimed at facilitating real-time supply chain tracking and alleviating bottlenecks.
Though Petrisin will depart from the DOT with the incoming Trump administration, he remains optimistic about FLOW’s ongoing relevance in the transportation sector. “We believe we are only beginning to tap into the potential of what can be accomplished here,” he noted.
In his remaining time, Petrisin is focused on implementing the National Multimodal Freight Network, set to launch in early 2025. This initiative aims to guide states in optimal resource allocation for freight transportation and identify key federal investment priorities to improve the efficiency of trade movement.
As the complexities of the interdependent supply chain continue to be evident, the need for the FLOW platform remains pressing. Petrisin acknowledged the importance of lessons learned from the COVID-induced port congestion and emphasized the vital role of early information sharing in fostering resilience amid future disruptions. “No one in this industry anticipates a decrease in challenges, so providing strategic, timely information is critical for proactive management and responsiveness when volume shifts occur,” he concluded.
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