The 2:00 Minute Warning

I love the book Predictable Surprises because the authors did a great job of explaining why it’s so important to take a look at what’s going on and consider how these things will impact you and your company. The authors point out that in scanning the environment, you can avoid being surprised by events that are predictable.

With that thought in mind, here are two things that should be on your radar screen because both of these things have the potential to impact your supply chain. Specifically, the situation with UPS and the Teamsters, and the unresolved negotiations between the PMA and the ILWU at the West Coast Ports are issues that should concern every shipper in North America.

Negotiations with the UPS and the Teamsters

For a couple months now, UPS has been reassuring customers that they expect to reach a settlement and the parties will come together prior to the expiration of their contract which ends July 31.

But last week, an article highlighted the challenges that will need to be addressed in order for those two parties to come together. And after checking with the experts in our network, the consensus is that there is a 75% likelihood that there will be a "work stoppage" (better known as a strike) with UPS.

On the surface, the key issue appears to be wages. But there is a whole bunch more going on. While the president of the teamsters has made it known that they’ll be seeking significantly higher wages, primarily because they’re unhappy about what happened in 2018 and they are concerned that their wages haven’t grown in tandem with the profitability at UPS, there are other important issues going on. For example, they want to see the trucks include air conditioning. Folks, there are approximately 500,000 trucks in the UPS network.

As you look into the future, you have to ask: How would my company be affected if there is a strike or "work stoppage" at UPS?

Negotiations with the PMA and ILWU

Meanwhile, the contract between the PMA and ILWU which expired in July last year is still unsettled. Fortunately, there has been a precipitous drop in volume at the West Coast Ports. And the ILWU has been working in good faith. Coupled with the drop in demand, the ports are operating at close to pre-pandemic levels of efficiency. But a recent article highlighted that the locals within the ILWU are eager to get the contract resolved and might resort to actions which could result in port disruptions.

Again, it’s important to ask: How would this affect your company?

Fortunately, at TranzAct we have a wealth of expertise and experience in supporting companies who are considering how these changes would impact their supply chains and what options they face. So if you'd like to consider how scenario planning exercises could benefit your company, or if you have any questions, we encourage you to get in touch.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT
CONNECT ON LINKEDIN