There might be a perfect storm brewing between strained labor relations on the West Coast and the lockdowns in China.
Uncertainty surrounding the West Coast labor dispute continues and Port of Long Beach officials doubt that a settlement will be reached by the July 1 deadline. They’re certainly hoping things go better than they did in 2014 when the two parties last met to iron out contract issues. That was a long, contentious battle, only resolved when the White House stepped in. Adding credibility to the above concerns, the union representing dockworkers—ILWU—has requested a halt to contract negotiations until June 1. While it’s not clear why they made the request, one source says it may be due to the lack of progress made since contract talks began on May 10.
An estimated 260,000 teu of Shanghai’s unshipped cargo is set to swamp the market this summer, making the peak season “even more chaotic” than last year. According to new analysis from Drewry, China lockdowns have stored up problems for a global container distribution system “already severely stressed and facing reduced capacity due to pervasive congestion”. There’s still a significant worker shortage in rail, port, and trucking in both China and the US, which is hampering movement at major ports, with ships waiting for weeks to berth.
Who’s to blame for the current supply chain chaos? Many would immediately point to the pandemic, but some are placing blame on giant container ships. Megaships were first introduced in 2006 and today they’re the norm. However, they’re simply too big for most ports. And let’s not forget the chaos the 1,300-foot Ever Given caused in 2021 when it became wedged in the Suez Canal. Yes, these mega-ships move lots of cargo, but what can happen when the cargo arrives at the port is problematic.
Let’s conclude with one other issue that could take its toll on the supply chain. Unusual weather events and climate issues. For whatever reason, sea surfaces are getting warmer, which could lead to more powerful hurricanes. Loss prevention experts feel the shipping sector should take note and adapt to what could become the new norm.
