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Looming Port Strike Reflects Need For Apparel Supply Chain Management

ocean-freight-apparel.jpgSupply chain disruptions that stem from events outside companies' control can catch them most off-guard and be the most damaging. This week strike negotiators reached an agreement to end a week long strike at ports in Los Angeles and Long Beach, California but a looming port strike among workers in nearly three dozen other ports up and down the Atlantic and Gulf coasts shows just how much. The West coast strike's after affects will likely cause shipping delays and price increases for a few weeks.

The Eastern strike would involve nearly 15,000 longshoremen and shut down ports from Maine to Texas. Talks between the United States Maritime Alliance and International Longshoremen’s Association, whose original contract expires Sept. 30, broke down in August. Thankfully, a 90-day contract extension was reached Sept. 21, postponing the threat of a work stoppage until the end of 2012.

If the dockworkers' union eventually follows through with the strike, according to The New Jersey Star-Ledger, the price tag for strike would be very, very steep:

A port strike would cost the region $136 million a week in personal income and another $110 million in economic output, according to an analysis by the Port Authority of New York and New Jersey obtained by The Star-Ledger. The analysis, written by the P.A.’s chief economist, also warns that "short-term disruptions would also lead to long-term structural changes, which could create additional economic costs."

[…] A separate analysis was released Monday by the National Retail Federation, saying some damage has already been done to Gulf and East Coast ports by the mere threat of a strike. It said cargo has already been lost to West Coast ports, where large retail chains planning for the holiday season have rerouted October deliveries because dockworkers there are represented by a different union, and there is no threat of a walkout.

Note that the strike didn't even have to actually take place for it to have an effect on nationwide supply chains. Even the mere threat of the strike has already had wide-ranging ripple effects.

Also note the expert supply chain management and flexibility demonstrated by the retail companies that have already adjusted their apparel supply chains in anticipation of the strike. It's a good example of how high-level fashion logistics can help avert major supply chain disruptions by anticipating them in advance and maintaining enough nimbleness to adjust on the fly.

Still, shifting course can often come with a cost. Imagine if you're shipping something made in Morocco intended for market in New York. Yes, re-routing through the West Coast will allow you to avert the port shutdown, but shipping it to the West Coast and then trucking it cross-country back to New York both add significant costs. Adding length to your supply chain also introduces new vulnerabilities to disruption or mistakes.

To make major adjustments in your supply chain, therefore, requires full control over every link and maximum efficiency from end to end. At The Apparel Logistics Group, our apparel 3PL can help. Contact us to learn more.

Posted: 12/12/2012 3:33:05 PM by Global Administrator | with 0 comments


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