Freight Labor Unrest is Going Global and Weighing on Supply Chains

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Walkouts at UK ports, last-minute talks for US railroads, are among a growing series of conflicts involving workers vital to trade.

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The conflicts count workers hauling freight around the world, from truck drivers in South Korea to package sorters at Amazon distribution centers in New York, after more than two years with higher wages and better working conditions. Excited to apply pressure. Stressed business during the pandemic.

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Liz Schuler, president of the AFL-CIO, the largest federation of labor unions in the US, said “frontline workers” are tired of being called essential and considered expendable. Will continue to watch.”

In Britain, some labor conflicts, including the attacks on Liverpool and the Port of Felixstowe, have temporarily halted freight transport operations. Others, such as the near-strike against US railroads and ongoing contract negotiations involving US West Coast dockworkers, have triggered contingency planning by businesses to wider effect.

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High inflation is adding to the pressure for higher wages. Workers at the port of Liverpool declined a contract offer that included an 8.3% annual wage increase, and the Unite union said the consumer fell short of the increase in prices.

In South Korea, truck drivers rattled the country’s export-driven supply chains in June after they stopped work for a week over a dispute over drivers’ subsidies to cover wages and rising fuel costs.

The companies say the conflicts have made logistics planning more difficult and that supply-chain shocks such as the recent Covid-19 shutdown in China and the war in Ukraine have heightened tensions.

Morten Landry, managing director of air and sea in the UK and Ireland for Danish freight forwarder DSV A/, said: “This is likely to have a massive impact on supply chains and cause additional costs for importers and exporters around the world. Doesn’t take too much disruption.” s.

In recent months, the DSV has carried out attacks at Felixstow, Britain’s busiest container port, and Hamburg, Germany. Mr Landry said the company tries to move cargo faster to alternate ports when the gateway is closed, a change that triggers a scramble for trucks, drivers and freight equipment at those ports and has led to delays. and have high cost.

Felixstow’s dockworkers laid off their jobs for eight days in August and planned a second eight-day strike starting September 27 for higher pay increases. A series of attacks on North Sea ports in Germany, including Hamburg, one of Europe’s busiest container ports, disrupted operations for months before a contract agreement was reached in late August.

In the US, strikes have become more common this year, according to labor experts, as strikes from teachers to nursing-home workers strike demands for wages and quality of life.

Truckers effectively closed the West Coast’s third-busiest port in Oakland, Calif., for a week in July as they protested outside terminals to protest a state law that they said was for them. Working as independent contractors gets tough. Inc. in New York City in April. U.S. warehouse workers voted to form the e-commerce giant’s first union in the US, and a union election is due next month for Amazon site employees in New York. Amazon employees in the UK have walked out as they push for an increase in their hourly wages.

Last week the Biden administration avoided an orderly freight rail shutdown after brokering a last-minute deal between railroads and unions. That tentative contract agreement between the two holdout unions still had to be approved by rank-and-file members, while one of the many unions negotiated separate agreements with the railroad, after its membership changed the terms of the contract. A deal will be retried after being rejected.

At U.S. ports, retailers and manufacturers are diverting thousands of containers from West Coast to East Coast gateways because of concerns that it could disrupt contract negotiations between dockworkers and employers from Washington state to Southern California.

“It’s been a truly phenomenal year,” said Harry Chase, senior director of central materials at GE Appliances, a subsidiary of Chinese home appliances and electronics company Haier Group Corp. This is the first time we’ve seen a combination. There is individual labor unrest around the world.”

Mr Chase said some shipments of GE equipment had been delayed at ports in Belgium, France and Italy, which were overwhelmed by cargo shipped from striking German ports.

“It really caused us to be flexible and move different containers into different ports that we don’t normally run out of,” Mr. Chase said.

Some of the Cincinnati-based freight broker’s clients hold more inventory as a safety stock in case of labor disruptions, said Joe Trussner, executive sales director for Total Quality Logistics LLC.

Labor concerns have risen as some widespread pandemic-driven upheavals in supply chains, including factory closures and vessel backlogs at ports, have eased. Now, the prospect of walkouts and business closures adds new uncertainty, said Tim Craft, an associate professor of operations and supply-chain management at North Carolina State University’s Poole College of Management.

“It has left a lot of companies still in the melee mode they’ve been living in over the past few years in the pandemic,” said Dr. Kraft. “The good thing is that a lot of companies have gotten really good at scrambling.”

Paul Berger at [email protected] and Liz Young at [email protected]

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