The 2:00 Minute Warning

I have a quick question for you. How do you manage your transportation and supply chain areas when there are a host of unknowns that could easily throw your supply chains out of whack?

For example, as we go to press with this week's Two Minute Warning, on Monday, it looked like a rail strike was imminent. Yesterday, Joe Biden and Nancy Pelosi said that they will get legislation which will order the rail unions to accept the proposed mediated settlement that was issued in September. What no one knows is how the unions - especially those unions that rejected the proposed contract - will respond.

If the legislation ordering the unions back to work doesn't get passed and signed into law by Friday, then the railroads will have to potentially focus on clearing freight from their lines instead of moving freight to destinations. It doesn't take a rocket scientist to know that any disruption would have widespread ramifications.

The Biden Administration touted the economic benefits of the new agreement - an agreement by the way that will expire in 2024. Here is an important point: The railroad workers are concerned about the work schedules they have had imposed on them. It looks like when the railroads cut their work force, they forgot to consider the long term implications. These issues aren't going away anytime soon.

What makes this situation concerning is that if just one union ignores the legislation and decides to strike, no one knows if all the other unions will honor the picket line and effectively shut down the railroads.

To get a better understanding of the context for this potential strike, check out the article “Not your father’s railroad anymore” from Railway Age which will help you understand why some of the unions have voted no to the proposed agreements.

This potential disruption is just one of five items we’ve outlined that should be on your radar screen if you’re managing a supply chain. If you haven't requested this report, do so right now because it also highlights the unresolved contract negotiations affecting our West Coast Ports and other important issues. The feedback from those that have requested and read the report has been very positive.

If you could use help or advice for managing your supply chain, we encourage you to get in touch.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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