Next moves for supply chain leaders following the U.S. port strike

With the U.S. port workers’ strike on pause, supply chain leaders can return to boosting their preparedness.

Supply chain leaders need a strategic stand on risk, planning and automation

The recent massive port workers’ strike along the U.S. East and Gulf coasts left many supply chain leaders scrambling — again. 

Strikes are only one of the myriad disruptions that supply chain leaders face, so why does each one seem to come as such a surprise? 

Here are some ways that supply chain leaders can improve their preparedness in general as they approach the issue of automation, which remains front and center as a point of contention in this latest strike.

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    Why are supply chains so often wrong-footed despite the constancy of disruption?

    Even chief supply chain officers (CSCOs) with a strong risk management mindset may fail to push risk planning down into logistics, where the function often isn’t measured in terms of risk management and planning, or staffed adequately for it. 

    Logistics management, and the supply chain organization as a whole, then becomes vulnerable to the “fighting fires” mentality, where adapting to disruption means adopting tactics such as relying heavily on third-party logistics providers (3PLs). 

    Reactive risk management can work relatively well in the short term, but it is not sustainable and comes at a significant cost (in part because it happens over and over again). For instance, during the pandemic, the reliance on 3PLs led to significant unplanned expenses for organizations as ocean carriers profited. Corporations took a hit to the bottom line but solved only for the problems at hand. 

    The latest strike is just another reminder that supply chains must shift from reactive approaches to more sustainable and efficient integration of supply chain risk management, and planning into logistics.

    With the U.S. port workers’ strike on pause, supply chain leaders can return to boosting their preparedness.

    Consider the strategic value of automation to your supply chain

    While the U.S. East Coast port workers extended their contract to Jan. 15, 2025, automation remains a sticking point. Even with this extension, it appears the International Longshoremen's Association (ILA) is still working to shore up guarantees from their United States Maritime Alliance (USMX) employer group to ensure that their work won’t be automated or semi-automated by cranes and driverless trucks, which can shuttle goods from container ships with little or no human intervention.

    Notably, West Coast port workers have previously secured significantly higher wages while allowing automation, so it’s unclear where these negotiations will land. But whatever the ultimate terms, the issue for supply chain leaders remains the strategic fit of ports. For CSCOs, the decision to use a particular port is based more on its role within the supply chain rather than its level of automation. 

    Factors such as location, connectivity to rail and road networks, and overall efficiency will continue to play a more significant role than the question of whether the port is automated —  unless and until that level of automation and technological advancement delivers gains in performance and productivity that can tangibly drive supply chain goals more effectively.

    Use this time to manage disruption to logistics proactively

    While this potential disaster appears to have been dodged — or at least stalled — now is the time to anticipate and manage the impact of future disruptions to your logistics strategy:

    • Actively manage a proactive risk management program that allows you to take preemptive actions in cases of a potential disruption.

    • Assess your risk tolerance and identify preemptive measures, such as  diversifying logistics providers or changing shipping modes, where you can and where it makes business sense.

    • With this short-term reprieve, partner with your ocean carriers and other providers to discuss their contingency plans, and how they will support you during a potential period of disruption.

    • Develop inventory strategies, such as building up stock at customers’ or local warehouses to help mitigate the impacts of disruption as needed. 

    • Communicate and manage the message to internal and external stakeholders. Make sure sales and customers know what’s coming, as well as the potential impacts, and how they’re planning to support customers during that time. 

    • Work with customers to pull forward orders and collaborate on solutions.

    US Port Strike FAQs

    How did the U.S. port strike affect supply chains?

    The U.S. port strike caused significant disruptions along the East and Gulf coasts, halting work at crucial ports that handle consumer goods and industrial materials. This led to delays in supply chains, raising the risk of shortages and increased costs for industries dependent on these ports. The longer the strike lasted, the greater the economic losses, which could have worsened inflation and delayed recovery efforts after recent natural disasters.

    How long will it take for supply chains to recover from the strike?

    The exact time for supply chains to recover from the U.S. port workers’ strike is uncertain, but it could take weeks. Backlogs at ports will need to be cleared, and disrupted schedules will require time to normalize. Businesses relying on the affected ports may face ongoing delays, as cargo rerouting and logistical adjustments will be necessary to stabilize operations.

    What should businesses do to prepare for future port strikes?

    To prepare for future port strikes, businesses should diversify their supply chains by using multiple ports, including those less likely to be affected. They can also build up inventory levels for critical products and explore alternative transportation methods, such as by air or rail. Strengthening relationships with suppliers and investing in technology to track shipments in real time will help companies stay flexible and responsive during disruptions.

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