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Where's My Stuff? The West Coast Strike is Over….Get Ready for the East Coast to Shut Down!

Just when you thought that global shipping channels were re-opening and imports/exports to the US were going to resume after the union settled in Los Angeles, the word on the street is that the East Coast ports are ready to strike this coming Monday. An official at the National Retail Federation warned that a strike at East Coast ports could extend from Maine to Texas and have a much greater impact on retail sales compared to the West Coast port strike, Reuters notes. The issue of course is the International Longshoreman’s Association who extended their collective bargaining agreement until December 29. The agreement was originally set to run out at the end of September. The agreement covers 20,000 longshoremen who load and unload cargo from ships docking at East Coast and Gulf Coast ports. The two sides continue to negotiate, but a new agreement has not yet been announced. This week, the ILU announced that a strike is scheduled for Monday.

Once again, the popular press has completely missed this one. And again, the strike will halt cargo that will have a major impact on retailers, not to mention major industrial producers. As transportation costs have increased, more and more companies are putting more cargo “on the water”, due to the lower cost and normally reliable schedules. But in fact, ocean freight has not only become more unreliable as carriers have increased ship size, but productivity at ports has continued to drop due to union rules and lack of adoption of new technology.

Take for instance the requirement for the union agreement on the East Coast ports. One of the stipulations they are pushing for is to have 3 (yes that’s THREE) crane operators available and paid to work, when only one operator can run the crane. Hmmm…. let’s see…. how does that improve productivity? The biggest issue is that there are continued “slow-downs” and delays that hamper productivity, which means companies waiting for their freight to be delivered are put on hold for hours. Now with the strike imminent, hang on and get ready for serious delays, shock-outs in stores, and factory shut downs. In fact, many companies don’t really know where their shipments are in the chain – which is even more complicated if they can’t answer the question of “Where’s my stuff?”