The Supply Chain Matters blog provides our latest news capsule follow-up relative to updating readers to prior supply chain management developments that we have shared on this blog.
This particular update includes news of the labor union ratification of the new U.S. West Coast Ports labor agreement, and a current period of significantly more severe storms impacting the Southern Atlantic and Southern China coastal regions.
U.S. West Coast Dockworkers Ratify New Labor Contract
Members of The International Longshore and Warehouse Union (ILWU) have completed the voting process and have ratified a new six-year labor contract covering 29 U.S. West Coast ports. The organization indicated that 75 percent of members voted for contract ratification.
The labor talks which began in May 2022 dragged on for a considerable amount of time leading up to a brief period of various sporadic labor disruptions and a call for a cooling-off period by officials in the Biden Administration, which quickly led to a tentative agreement.
Details relative to the new contract seem to be lacking with both parties refraining from providing details. According to reports from Reuters, the deal, which is retroactive to July 1, 2022, includes a 32 percent pay increase over the span of the contract as well as a one-time bonus for working through the early days of the Covid pandemic.
This new labor agreement is expected to provide a period of added stability as industry supply chains continue with efforts to augment their supply networks with added agility and supplier resiliency.
One of the ongoing issues is whether this long period of U.S. West Coast port uncertainty has led to existing or ongoing shifts in ocean container routings to alternative ports such as the U.S. Gulf Coast or major East Coast ports.
A new consideration to such shifts is a current development related to ongoing concerns toward increased lowered water levels in the approaches to the Panama Canal. The development is resulting in building multiday backup of ships waiting to traverse the canal. The lowered basin levels are attributed to severe drought conditions in the area brought about by El Nino climate change forces and there are predictions by scientists that the condition may continue into next year.
Stronger Hurricane and Typhoon Events on the Rise
Industry supply chains must once again initiate active monitoring activities related to another rather active period of major hurricane and typhoon storm events across the globe.
Southern Atlantic Ocean Region
Unusually warm sea temperature levels spanning the tropical Atlantic, Caribbean Sea and Gulf of Mexico regions are rapidly fueling devastating storms. As we pen this posting there have been three named hurricanes spawned from the region including Hurricane Franklin, Hurricane Gert and Hurricane Idalia. According to the U.S. National Weather Service, this is the first time since 1950, that the Atlantic has had two hurricanes, that being Franklin and Idalia, with 110 plus mph winds in August simultaneously.
Hurricane Idalia provided the most storm related headlines this week with damaging winds and significant amounts of rainfall impacting portions of western coastal and the panhandle regions of Florida. The storm then rapidly moved up to the coastal regions of Georgia and South Carolina, to include coastal areas that include the Ports of Savannah and Charleston. The storm made landfall near Keaton Beach, Florida as Category 3 hurricane storm with maximum sustained winds of 125 mph. In this storms path have been significant wind and flooding related damage along with disruptions to transportation and logistics that are now being assessed.
Once more, other tropical depressions are spawning in the general area that may well lead to other named hurricanes in the coming weeks before the season ebbs in November.
China and Taiwan Region
As we pen this posting Typhoon Saola is barreling towards the Hong Kong and China’s southern Guangdong province coastal area with winds of more than 125 miles per hour and predictions of a ten foot sea surge. This storm is characterized as among the five strongest to impact this particular region since 1949.
Thus far hundreds of flights in the region have been cancelled, stranding passengers and air cargo. Reportedly across Guangdong, in excess of 780,000 people had been evacuated from high-risk areas and businesses are temporarily closing, releasing employees so that they can seek proper shelter and prepare for the effects of the storm. The city of Shenzhen, with a population of more than 17 million, reportedly suspended work for businesses and financial markets from Friday afternoon through Saturday because of the threat of severe winds.
As many of our readers are aware, the coastal Guangdong region and a major hub for high tech and electronics production among other industry related manufacturing.
Saola is similarly but one of three other tropical cyclones to have formed in the northwest Pacific Ocean and South China Sea area. Typhoon Haikui is approaching Japan’s Okinawa Island along with Taiwan, another major manufacturing region including semiconductor fabrication. Forecasters indicate that the storm is set to hit the island on Sunday before heading towards China‘s province of Fujian, a further manufacturing region.
Various industry procurement, product management and operations teams will likely be monitoring the effects of all of these significant storms in the days and weeks to come.
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