From seaport docks in Los Angeles and Liverpool to rail yards in Chicago and warehouses in Europe and the U.S., clashes between cargo workers and management have been rising this year, adding complications and uncertainty to the flow of goods around the world.
A two-week strike that dockworkers at the U.K.’s Liverpool port launched Tuesday is the latest in a series of walkouts to hit the country’s transportation networks, and follows an agreement in the U.S. last week that averted a potential nationwide freight rail strike hours before it was set to begin.
The conflicts count a range of workers that handle freight around the world, from truck drivers in South Korea to package sorters at Amazon distribution centers in New York, who are newly emboldened to press for higher pay and better working conditions after more than two years of stressed business during the pandemic.
Frontline workers are “tired of being called essential and treated as expendable,” said Liz Shuler, president of the AFL-CIO, the largest federation of labor unions in the U.S. “I do think this is emblematic of what we have seen and what we are going to continue to see.”
Some of the labor battles, including the strikes at Liverpool and at the Port of Felixstowe in the U.K., have shut down freight transport operations for a time. Others, such as the near-strike against U.S. railroads and ongoing contract talks involving U.S. West Coast dockworkers, have triggered contingency planning by businesses bracing for broader impact.
High inflation is adding to the pressure for higher wages. Workers at Liverpool’s port rejected a contract offer that included an 8.3% annual pay increase, and the Unite union said that fell short of increases in consumer prices.
In South Korea, truck drivers snarled the country’s export-driven supply chains in June when they stopped working for a week in a dispute over pay and the drivers’ demand for subsidies to cover rising fuel costs.
Companies say the conflicts have made logistics planning more difficult and exacerbated strains caused by supply-chain shocks such as the recent Covid-19 shutdowns in China and the war in Ukraine.
“It doesn’t take a lot of disruption to cause massive effects on supply chains and incur additional costs for importers and exporters worldwide,” said Morten Landry, managing director for air and sea in the U.K. and Ireland for Danish freight forwarder DSV A/S.
DSV in recent months has navigated strikes at Felixstowe, Britain’s busiest container port, and at Hamburg in Germany. Mr. Landry said the company tries to rapidly shift cargo to alternative ports when a gateway closes, a change that triggers a scramble for trucks, drivers and freight-handling equipment at those ports and which has led to delays and higher costs.
Dockworkers at Felixstowe walked off the job for eight days in August and plan a second eight-day strike starting Sept. 27 in a push for higher wage increases. A series of strikes at North Sea ports in Germany, including Hamburg, one of Europe’s busiest container ports, disrupted operations for months before a contract agreement was reached in late August.
The U.S., strikes have become more common this year, according to labor experts, as workers from teachers to nursing-home staff take to picket lines over pay and quality-of-life demands.
Truck drivers effectively shut down the West Coast’s third-busiest port at Oakland, Calif., for one week in July as they picketed outside of terminals to protest a state law that they said makes it harder for them to operate as independent contractors.
Workers at an Amazon.com Inc. warehouse in New York City in April voted to form the e-commerce giant’s first union in the U.S., and staffers at an Amazon site in upstate New York are scheduled to hold a union election next month. Amazon workers in the U.K. have held walkouts as they push for an increase in their hourly wage.
The Biden administration narrowly avoided a systemwide freight rail shutdown last week after brokering a last-minute deal between railroads and unions. That tentative contract agreement between two holdout unions must still be ratified by rank-and-file members, while one of several unions that negotiated separate agreements with the railroads will try again for a deal after its membership rejected the contract terms.
At U.S. ports, retailers and manufacturers are diverting tens of thousands of containers from the West Coast to East Coast gateways because of concerns that contract talks between dockworkers and employers from Washington state to Southern California could spark disruptions.
“It has been a really unprecedented year,” said Harry Chase, senior director for central materials at GE Appliances, a subsidiary of Chinese home appliances and electronics company Haier Group Corp. “This has been the first time that we’ve seen a combination all across the world of different labor unrest.”
Mr. Chase said some GE Appliances shipments have been delayed at ports in Belgium, France and Italy that were overwhelmed by cargo diverted from striking German ports.
“It really caused us to be flexible and move different containers to different ports that we normally wouldn’t flow out of,” Mr. Chase said.
Joe Trusner, executive sales director at Total Quality Logistics LLC, said some of the Cincinnati-based freight broker’s customers are holding more inventory as safety stock in case of labor disruptions.
The labor concerns have grown as some of the broader pandemic-driven upheaval in supply chains, including factory closures and vessel backlogs at ports, have eased.
Now, the potential for walkouts and business shutdowns adds new uncertainty, said Tim Kraft, an associate professor of operations and supply-chain management at North Carolina State University’s Poole College of Management.
“It’s left a lot of companies still in that scramble mode that they’ve been living in the past few years in the pandemic,” Dr. Kraft said. “The good thing is a lot of companies have gotten really good at scrambling.”
Source: WSJ Link