"What, Me Worry?" Ongoing Contract Negotiations With Railroads and Ports Threaten Supply Chains!

Nov 22, 2022



One of my favorite cartoon characters is Alfred E. Neuman from Mad Magazine. In the midst of chaos and confusion, Alfred would utter: “What, Me Worry?” Fortunately, Alfred has never had to deal with today’s supply chain challenges. Because if Alfred were to peruse a list of things that can affect supply chains, there would be plenty of stuff to worry about.

Right now, perhaps the number one item at the top of the “What Me Worry” supply chain list is the possibility of a rail strike - or, at a minimum, disruptions in rail service - because of the uncertain and unresolved status between the railroads and their unions.

For an in-depth understanding of the issues, I recommend that you read this outstanding report on the status of rail contract negotiations that was issued on Sunday by our friend Scott Group, at Wolfe Research. More on that below.

The second item on the “What Me Worry” list is the unresolved contract negotiations affecting the West Coast ports. As we have warned in previous Two Minute Warnings, we are once again seeing union activity at a local level that is disrupting the ports in Oakland, and could well spread to other ports on the West Coast.

If you’re thinking these issues don’t affect you since you don’t procure ocean or rail freight, think again – the transportation networks you’re dealing with are all interconnected and influence each other. To learn about more issues that are on the “What Me Worry” list I recommend that you sign up to receive a guide to five issues that could significantly impact your supply chain.

If you want to put down the “What Me Worry” list so you can sleep better at night, here is what you need to do. Send me an email or give me a call and learn more about how TranzAct’s consulting experts can help you engage in some scenario planning exercises that will help you understand options and strategies for managing your supply chain in this sea of uncertainty.

Before closing, if you didn’t have a chance to join us for our recent webcast, “What You Wish Your CEO Knew About Truckload & LTL Freight” I have a question: “What were you thinking?” 😊

On a serious note, this webcast that we hosted with our friends from CSCMP’s Center of Excellence was outstanding. But don’t just take my word for it, here is what Susan, from a very large shipper noted:

“I was able to catch the first half of the "Why Procurement of LTL and Truckload Transportation is Different than the Typical Procurement Model" zoom call and it was GREAT! Probably one of the best calls I've attended.”

The reason it was so good is because Dr. Chris Caplice from MIT did a fantastic job in explaining why the traditional procurement model has changed for truckload and LTL. He also provided some thought-provoking insights about what shippers wish their CEO knew about truckload rates and contracts. And Kevin Smith, the SVP of Supply Chain for CVS before he retired, offered his perspective on the current marketplace, where it is going and how you can more effectively communicate logistics and supply chain issues with your C-Level executives.

Like I said, the response has been fantastic! You can check it out and find the recording here.

Caplice - truckload rates webinar RECORDING copyhttps://info.tranzact.com/webinar-recording-caplice-smith-11-15-22

One final note. As far as the Wolfe Survey and their insights into the rail strike, last Monday another union voted to reject their tentative agreement as detailed in an article from FreightWaves, and a strike could begin as soon as December 9. There are now four unions, with a combined membership of close to sixty thousand rail workers, that have rejected the contract agreement that was announced in September. Scott’s report will also help you understand the impact of a rail strike on supply chains - if one occurs after December 10.

Another important benefit of downloading the report is that it will give you a chance to participate in and get the results from Wolfe’s Quarterly Survey. This is an extremely important report that will help you understand critical issues that are affecting the transportation marketplace at any given point in time.

Have a great Thanksgiving Holiday!