Ninety minutes after the call for outside mediation, both sides in the Port of Los Angeles and Long Beach labor stoppage came to a tentative agreement last night, ending an 8 day port strike. According to a published report from Reuters, federal mediators who were called in to join the negotiations showed up just as the settlement was being reached. Members of the clerical union are expected to ratify the agreement.
Readers can garner the scope of this port strike disruption by viewing our two previous Supply Chain Matters commentaries, our initial commentary, and our second commentary last night. We were pleased to note lots of reader comments and shared viewpoints.
The core of the dispute was focused on the perceived outsourcing of clerical work by port management and reports indicate that a compromise agreement was reached by both sides. Both union and management negotiators have publically hailed the settlement.
Today, as west coast port operations begin a transition toward a state of normal operations, supply chain teams must now deal with the after effects of delayed or diverted shipments. Since the bulk of current inbound container freight is normally targeted for seasonal mid-winter and early spring demand fulfillment programs, logistics teams will be monitoring efforts to dig out from the west coast port backlogs as well as locate potentially lost or diverted shipments. It may well take the remainder of December to sort out the backlog and return port activity back to a state of normal operations.
For supply chain teams, the focus also turns to U.S. east coast ports, where stalled labor negotiations involving a number of major ports up and down the east coast threaten another potential disruption in the coming weeks.
All of these continuous disruptive incidents are reinforced reminders that supply chain wide planning and decision-making needs are shifting toward the need for supply chains to be more responsive to unplanned events, and more predictive for transforming disruption into more opportunistic business outcomes. They also add additional reinforcement the increased interest in more response management and predictive based decision-making processes.