East Coast Port Strike Looms Just Weeks After Los Angeles and Long Beach Shutdown

Posted: 28th December 2012
East Coast Port Strike Looms Just Weeks After Los Angeles and Long Beach Shutdown

We recently wrote about the effect of flooding in Thailand on the global supply chain and will be following that post with a series on disruptive supply chain events. Given the threat of an east coast port strike from Maine to Texas starting at midnight on December 29, the first historical event that we’ll examine is the seaport strike in Los Angeles and Long Beach – clerical workers and sympathetic longshoremen –   that took place during late November and early December bringing trade at America’s busiest port to a standstill for eight days. If you’re not familiar with the event, a summary timeline is provided below generated using Recorded Future.

The strike was resolved in relatively short order, and even as ships from around the world were diverted to other ports (many to Mexico), the coverage of these labor protests was almost solely in the United States. There is minor coverage from other areas of the world, but this event never reached the global saturation of a disaster like the Thailand flood. You can see this coverage described below.

Outside of the US and social media, which is untagged by country of publication in this case, the greatest interest comes from trade allies in Canada, the UK, Australia, and Taiwan. The Argentina Star piece is a syndicated AP write up. The Iran report is clearly an outlier in terms of global coverage, and unsurprisingly it leads with the word “paralyzes”, but it proves to be a brief summary with little additional color.

In the media coverage of the strikes, there was a limited amount discussed about specific businesses that might be affected by delayed delivery. Some brief mentions were made of company specific cargo ships – Hyundai – and the efforts of companies like VF Corporation, which handles Lee, Nautica, and Wrangler brands, and the Levi’s company lobbying the federal government to get negotiations moving. And the mention of Wal-Mart, in this case, is not a disruption of their business but in relation to protesters of that company serving as inspiration to the longshoremen.

Was there any long term delivery damage done by the strike? Not particularly. But in the short term, inevitably yes, especially for smaller retailers given the holiday season timing. As you can see in the timeline below, goods from sweaters to comic books to Rx jump ropes were out of stock due to the dock shutdown. At the same time there isn’t much evident disruption to major retailers although this doesn’t make the event trivial. There were very real economic consequences as evidenced by the founder of the Los Angeles-based Andean Dream LCC, who said a strike on the East and Gulf coasts could bankrupt her company dependent on imports from the Bolivian Andes.

Below is a timeline of the predictive statements about impacts of the LA port strikes and the impending threat of a similar shutdown on the east coast should the United States Maritime Alliance fail to reach an agreement with the International Longshoremen’s Association before December 29.

The Long Beach and Los Angeles port strike was evidence of how several hundred workers can be disruptive to organizations with one channel of transport and no contingency plan. That said, there seems to be little effect on bigger names given the brevity of the dispute and  fall backs such as diversion to other ports or the use of air freight in place of the stalled shipping containers.

The impending east coast port strike (follow latest in Recorded Future) carries the potential to damage small businesses with a short stoppage and potentially carry greater ramifications for larger, more connected organizations given the lack of alternative delivery options (northwest and Mexico) that were made available during the west coast strike. What other factors should be watched as labor stoppages are threatened at transportation hubs? Leave us a note in the comments below.