In another seven days US Atlantic and Gulf coast ports may be hit by a dock strike. (Here and here and here and here and here and here.)
This possibility has been recognized all year. It is likely that higher-than-usual summertime flows into these same ports reflect supply chain front-loading (more). Recent record volumes arriving into the ports of LA and Long Beach probably represent some proactive redirection of flows (here and here). There is considerable variation — and varied constraints — among alternative freight channels (more and more).
Despite mitigation efforts, any extended strike will seriously disrupt many supply chains. Whenever this scope and scale of flow is disrupted otherwise hidden pinch-points will be exposed. We can watch carefully as the network shudders, shakes, and attempts to adapt. These behaviors and outcomes will help us understand dynamics that are too often obscured. This understanding can help us help the network to effectively adapt.
Even a short strike will prompt network congestion (more). As seen so clearly during the pandemic, this will take considerable time to clear. How much congestion, how far upstream from idle ports is something we can model and anticipate. I will be surprised if anyone can predict anything close to complete outcomes. It has been too long — and the supply chain has changed too much — since the last large scale US dock strike.
How other unions (here and here) and non-union workers react to a dock strike can make a bad situation even worse. But anytime this much capacity is suddenly extracted from midstream flows the outcome will be tough. This labor dispute could slash over half of US maritime flows. Especially when preexisting capacity is concentrated in so few high capacity nodes, resilient options are scarce.
The Biden administration was active and successful in a 2023 effort to avoid a strike of west coast dock workers (here and here and here). It is not yet clear such efforts will be attempted in the next few days (here). But the Biden administration has said it will not invoke a “cooling off period” to delay the Atlantic and Gulf coast labor action. The International Longshoremen’s Association has promised slow-downs if a cooling off period is imposed. The scuttlebutt that comes my way expects a strike (for both good and bad reasons) and once the strike begins expects a painfully long strike (the result of very human reasons — such as pride, anger, and fear — that will intensify the longer the strike continues).
Next week there will still be abundant supplies. There will still be enormous demand. The infrastructure and functionality to match this demand with that supply will persist. In case of a strike, however, network capacity will suddenly be cut basically in half. Demand will often not be fulfilled. Prices for still available flows will increase. Those on strike will not be the only ones losing a paycheck as flows into and out of major ports slow and eventually stop.
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September 24 Update: Bloomberg reports, “Just as US policymakers shift focus from curbing inflation to shoring up the job market, the economy faces a jolt that threatens the kind of supply-chain disruption and consumer discontent rife during the pandemic. This time, the shock looms just weeks before a knife-edged election. Some 45,000 dockworkers at every major eastern and Gulf coast port are threatening to strike Oct. 1. With talks at a stalemate since June, industry officials now believe a strike is inevitable, and ocean carriers and port operators have started sending out customer advisories and making contingency plans.”