The other day I asked a well-known oracle the following question: “Will the current stresses on the furniture supply chain, particularly transportation-related issues, be with us into 2022?”
The good news for everyone is the answer: “Very doubtful.”
The bad news is my source was the Magic 8-Ball I won in a Secret Santa session back when we worked in an office. Heck, I’m guessing one could do worse these days in looking for an answer to my question.
Right now, the variables are such that I don’t believe there is an answer. What if a major port in Asia suffers another coronavirus outbreak that adds to the backlog? That’s already happened at China’s largest port, Yantian. What if a plant gets shutdown for the same reason, even a whole country (hello, Malaysia)? Stateside, we still don’t have enough drivers or chassis to get goods out of port. I can hear you saying it: “Enough already.”
I was at the AHFA Logistics Conference last month, and while folks smarter about these topics than I am offered ways to manage the current transportation environment, they admitted there are no true near-term solutions. Those won’t come until demand and transportation capacity reach more of a balance.
One potential variable that’s gotten lost in all the noise but bears watching: The International Longshore & Warehouse Union and
Pacific Maritime Assn., which represents port operators and shippers, are set to start negotiations on the 2022 contract for longshoremen and other workers at West Coast ports.
In the past couple of years, ILWU and PMA have worked together pretty well, with the union voting in 2017 to extend their existing contract until July next year. That eased fears about potential disruptions had the regular negotiation cycle remained in effect, but the pandemic and ensuing constriction on ocean lanes along with overwhelming port traffic pretty much negated that potential benefit.
Nobody is showing their hand yet when it comes to contract negotiations affecting West Coast ports, destination for most U.S.-bound containers from Asia. Those talks will be very interesting, particularly if port congestion eases and vessel space begins to open back up in this year’s second half.
That scenario potentially could give the union a stronger hand in negotiations along the lines of “we were there for you when you needed us, now here’s what you can do.” ILWU also approaches the talks with a far more labor-friendly administration in the White House. Remember a few years back when President Obama sent Labor Secretary Tom Perez to seek resolution of the bitter contract battle in 2015.
Port automation always is a potential negotiating hot button: Truck drivers using the ports like it; ILWU doesn’t. Here’s hoping union and management can reach an agreement ahead of time and that we can avoid another round of logjams — remember 2015’s “Portastrophe” — after getting clear of the current environment of extreme delays and costs for ocean shipping.
