After a couple of tumultuous years of dealing with a bunch of challenging supply chain and logistics issues, 2023 has proven to be a bit of a reprieve for shippers. Supply chain disruptions have eased, the surges in demand have abated, and carriers are actually willing to negotiate rates once again.
But before you get too comfortable in your easy chair thinking that things will be calm on the transportation and supply chain fronts, you need to know there are some potential storm clouds on the transportation horizon. And these clouds could rain on your supply chain parade.
What are we talking about?
The International Brotherhood of Teamsters (IBT), also known as the Teamsters Union, have let it be known that they are not a bunch of happy campers. For example, when you watch this video of Sean O'Brien, the President of the Teamsters, calling Senator Mullin from Oklahoma a "greedy CEO" at a Senate hearing, or mention that corporations break the law with impunity, you get the sense that the Teamsters will take a very aggressive posture in their upcoming negotiations with some very important carriers. With that thought in mind, here is what you need to be watching.
LTL carrier negotiations - Over the next few months, the Teamsters will be negotiating a new contract with TForce Freight and a new contract with ABF. In early March, bargaining between the Teamsters and TForce Freight started for the current contract which expires July 31, 2023. Later in March, the Teamsters met with ABF Freight to begin negotiations for a new national contract for the contract that expires June 30, 2023.
While we are in the midst of a freight recession, the Teamsters will be focused on the fact that these carriers have the financial resources to fairly compensate their members after a couple of exceptionally strong years.
ABF and TForce are not the only carriers in the Teamsters' crosshairs. The Teamsters have also voiced their concerns about the restructuring of the Yellow (YRC) network. Since the Teamsters are on Yellow’s board, they have a powerful voice in addressing the consolidation occurring under the "One Yellow" initiative. This initiative focuses on cutting redundancies and involves the closing of terminals in the YRC network. From the Teamsters' perspective, it also involves the loss of jobs.
Parcel carrier negotiations - As we mentioned in a recent Two Minute Warning, the most significant negotiations of 2023 will involve the negotiations over a new contract between the Teamsters and UPS. Mr. O'Brien has warned UPS that his members will strike on August 1 if there is not a new contract by July 31. Let's cut right to the chase. Mr. O'Brien was involved in the last round of negotiations with UPS and some of the Teamsters believe that UPS got the better deal. Thus there are concerns that the Teamsters will look to "even the score" in these negotiations - which translated means, get ready for some intense and contentious negotiations.
West Coast port negotiations - Last but not least, let's not forget that there is still no contract in place between the PMA and the ILWU at the West Coast Ports. And there are signs that the ILWU members are not happy and looking for constructive ways to show their frustration. Fortunately, the volumes at the Ports of Los Angeles and Long Beach have fallen off a cliff, which means that the threat of a slowdown is not as consequential as it could have been last summer. We will continue sharing any news coming out of the West Coast port negotiations as the expired contract nears the one year point.
That leads us to the most important question of the day: Is your company prepared if any of these negotiations cause disruptions?
How can we help?
At TranzAct we have a wealth of expertise and experience that will help protect your supply chain in the event these disruptions occur. We are experts at fixing transportation and supply chain "stuff."
On an immediate basis, why not give me a call or send me an email and learn more about how our LTL sourcing and spend management solutions can save money and help avoid the impact of any disruption. What makes these LTL freight management solutions unique is that we take care of the "headaches" while protecting your ability to have a direct relationship with your carriers. If you'd simply like to Benchmark Your Rates we'll help you understand your options.
If you're in need of help evaluating your parcel options, our Parcel Reporting Toolbox is a dynamite tool that can show you how your parcel spend could change under different scenarios. You can schedule a demo with us anytime.
If you are trying to make sense of this crazy ocean market, or if you want to evaluate your ocean freight operations, our consulting group has some great resources that can provide insights and solutions. I encourage you to get in touch.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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