There has been a run of strikes or threats of strikes lately with the latest UAW strike impacting the Big 3 automobile manufacturers. If it lasts longer than a few days, there will undoubtedly be a huge impact on the end-to-end supply chain as well as the economy.

The two sides appear to be far apart in labor negotiations with employees asking to work 32 hours and get paid for 40 with a 40% raise while management agreed agreed to a 20% raise so far. As the strike spreads, it will impact additional manufacturing facilities and down-the-line supply chain partners. Unfortunately for the Big 3 automakers, Tesla and foreign automakers with facilities in the U.S. will be ready to pick up the slack. Alternatively, the workers have realistic concerns in that they haven’t been receiving cost of living adjustments with rampant inflation and regulations dictating electric cars which threaten their jobs. On the other hand, the non-union automakers do not have higher wages.

The economy doesn’t take sides. According to the Anderson Economic Group, if 143,000 UAW employees strike for 10 days, it could have greater than a $5 Billion dollar impact.

Supply Chain Impacts

In addition to severe economic impacts, the UAW strike will spread throughout the end-to-end supply chain.

• Suppliers: Suppliers will be impacted as orders are delayed and cancelled.
• Suppliers’ suppliers (multiple supplier tiers): The extended supply chain is vast supporting the auto industry. Impacts will carry down-the-line.
• Mix changes: If consumers need to purchase a car, they might switch to a different brand, changing the product mix of parts for the end-to-end supply chain. This is likely to lead to shortages, overages, and challenges. In essence, the right inventory won’t be in the right place at the right time because the demand has become unpredictable.
• Dealers & service centers: If the strike extends, it will impact dealers, service centers, parts and much more. Again, in this industry, it can spread like wildfire.
• Pricing: With limited availability, prices can go up. Inflation is already 20% higher overall vs 2019, and so additional inflation isn’t desirable as it directly impacts product cost, margins, investment, and consumers.
• Tesla & other car companies: If they can ramp up rapidly (scalability), opportunities abound. On the other hand, for consumers, prices are likely to increase.
• Wage increases: Strikes bring about more strikes. After all, if the railroads, ports, UPS and others didn’t gain a decent outcome due to the threat of strikes, it is doubtful the UAW would strike. As wages increase, price increases get passed on to the consumer and it spreads to other areas of the economy.

Transportation, goods movement, and industries with extended supply chains have such a large economic impact that these issues must be addressed rapidly to mitigate substantial supply chain risks.

Be Proactive

Don’t wait for strikes, down-the-line impacts, unhappy employees, or any of these issues to occur. Instead, take control of your supply chain. Here are a few strategies to deploy:

• Engage employees: One of the best ways to avoid strikes or stay non-union is to engage employees in their work.
• Empower employees: This goes hand-in-hand with engaging employees. Empower employees to make decisions within a reasonable guidepost.
• Prioritize your union negotiations & relationship: Clearly, if you have a union, there is a risk of a strike. How is your relationship? Are you prioritizing this relationship?
• Assess supply chain risk: Detail out the scenarios about how the strike might impact your business, your suppliers, your customers, and/or your extended supply chain.
• Backup sources of supply: No matter if you are related to this industry or not, you should prioritize backup sources of supply.
• Your supply chain network optimization: How should you change your supply chain to be resilient and prepared to scale up/ down etc.?
• SIOP (Sales Inventory Operations Planning): Put a SIOP process in place if you don’t already have one to stay ahead of changing conditions so that you are prepared to pivot, understand your alternatives, and are forward-thinking.

Don’t wait for problems to arise, especially when there are known risks. Stay on top of the risks in your industry, business, and end-to-end supply chain. Set your company up to be resilient, and monitor and adjust as needed.

The Bottom Line

Fingers crossed that a deal will be reached to avoid severe economic impact; however, we don’t want to trade an immediate economic impact for a long-term economic impact that will continue to spread through industry. Be vigilant, involve your executive team and get ahead of potential supply chain risks. If you want to learn more about SIOP, read our book of best practices for designing and implementing SIOP, SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth.

Please contact us with your stories, issues, and ideas on how these types of disruptions impact your company and end-to-end supply chain. And, please keep us in the loop of your situation and how we can help your organization with supply chain optimization, risk mitigation and supporting SIOP programs.

P.S. To get ahead of the curve on where to focus, download our complimentary report, and The Road Ahead: Business, Supply Chain & the World Order.

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Supply chain risks are exploding. Just look at the news, and you’ll see a potential UPS strike, a Canadian port strike, potential hurricanes (Hawaii, Florida), China stirring up potential conflict with China, the Crimean bridge attack, and much more. Any one of these issues could have a detrimental impact on the economy and could put a business in the wake of the issue out of business. Clients must prioritize preparation and prevention of significant risks.

For example, when I was VP of Product Supply for a mid-market manufacturer, our largest production facility (70% of the volume) was located in an area that could flood due to hurricanes. The Board of Directors wasn’t happy about purchasing excess stock year after year in preparation for hurricane season although we made a good case for it and continued to prepare. It used cash that couldn’t be invested elsewhere.

One year, a hurricane arrived that completely flooded the area. The cars were under water at the airport and no one could get to work, let alone trucks arrive with materials or leave with shipments to customers. The products were used in hospitals and nursing homes and so lengthy delays were not acceptable. Luckily, the builders of the plant had the foresight to build on a hill so that it was one of the only buildings in the area not affected; however, employees could not get to and from work.

The backup plant went into overdrive with production although it couldn’t produce everything that the main facility could produce. Because prevention and preparation were a priority, as soon as the roads were passable, trucks could pick up the excess stock and production could start full force because raw materials were already on hand. Thus, we were able to supply our customers with seamless customer service.

Unfortunately, most clients and colleagues are not in this position. They must prioritize preparation and prevention.

Preparation & Prevention Priorities

Preparing in advance will be far less expensive than waiting to respond once the issue occurred with contingent action. Once the hurricane arrived, no suppliers could get through with raw materials. Even if they could, they would have multiple priorities for businesses impacted by the hurricane. Most likely, we would have ended up on a waiting list. The best case scenario is that we would have to pay expedite fees if we could gain priority, and we would have waited a week to several months to get the required materials. Worse than that, our customer service would have suffered and we might have lost customers.

In today’s supply chain, the risks are much higher and voluminous, Thus, instead of suffering these unacceptable consequences, executives must prepare.

• Safety stock: Safety stock of key items or at certain times of the year (such as hurricane season) or for key customers make sense.
• Treat key suppliers as partners: Suppliers are not going to come through for you if you treat them as a vendor. Instead treat them as partners so that they will come through for you when these risks occur. You most likely should cut back on the number of key / critical suppliers and increase your focus on these partnerships. Be upfront with them, hold them accountable but also share in wins and losses while working towards win-win solutions/ path forward.
• Safety preparedness: Think about how to build safety into your process; it is not a one-time activity, and it isn’t something you should prioritize after the fact.
• Risk assessments: Develop meaningful risk assessments. Unfortunately, I’ve seen many risk assessments throughout the years that were more of a “check the box” exercise and not a focus on which risks to prioritize with accountabilities for leaders to mitigate those risks. Lots of paperwork with little sustenance will not lead to success in the coming decade.
• Inspections: You should follow up the assessments with the appropriate inspections to ensure everything is in order. These can be physical inspections, process inspections and systems inspections. Every client will be in deep trouble if their ERP system or IT infrastructure goes down. Inspect your critical manual work processes, your backup systems, etc.
• Insurance: Get the appropriate types of insurance to protect your company. You will need property insurance, D&O, automobile (potentially), cyber, etc. It isn’t easy to get insurance when you need it. You must get insurance before you need it.
• Other forms of insurance: Consultants can have an insurance like quality. There has been significant turnover and transition occurring since the pandemic, and several clients have kept us on board as an “insurance” to run decisions by to gain additional insights and to jump in and fill gaps while upgrading processes as needed. Trusted advisors and consultants can fill these types of roles.
• Sprinkler systems: You should install “contingent actions” as well such as sprinkler systems although prevention is better than preparation in this case! When you need it, you must have these contingent actions “ready to go”.

Please contact us with your thoughts on preparation and prevention stories, issues, and ideas. And, please keep us in the loop of your situation and how we can help your organization prepare to thrive and mitigate your highest risks. We are introducing a new SIOP (Sales Inventory Operations Planning) assessment to ensure your supply chain is ready to support your growth plans while mitigating critical risks. Contact us if interested to discuss further. Learn more about these topics in our blog and download your complimentary copy of our recently released special report: The Road Ahead: Business, Supply Chain & The World Order.

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A UPS strike was averted on the last day of the quarter, but it still hangs in the balance as the two sides are not on the same page! A potential UPS strike could have significant negative impacts on the supply chain and customer service. The head of the union said an imminent strike was likely when a counterproposal fell flat. Now that a new counterproposal was submitted, the imminent strike was called off with a new date set within a wee

The West Coast ports have been negotiating with the unions for months with no agreement in place. Recently they came to a tentative agreement after rising tensions resulting in delays in vessel servicing, congestion at the ports etc. A widespread strike along the West Coast could cost $1 billion a day! This agreement will take months to ratify. Unfortunately, details are scarce as to what is in the agreement and how that will impact competitiveness of the ports.

The threat of a port strike in Canada remains high. They voted in a landslide to authorize a strike. Vancouver and Price Rupert ports were seen as relief valves for shippers during the West Coast negotiations. Trade issues have been exacerbated since the Panama Canal has struggled due to low water levels which limits the weight of vessels in the canal.

This follows the rail strike that was averted at the last minute by Congress. A rail strike could result in $2 billion a day in lost economic output.

A UPS Strike’s Supply Chain Impacts 

Clearly, the economic impact is substantial at $1 billion a day for UPS! This doesn’t even tackle the hoards of supply chain issues caused by strikes of the transportation / goods movement systems. A few of the HUGE impacts include:

• Lack of deliveries of raw materials, components & supplies: This can bring production to a halt. Best case, schedules are changed, materials are expedited and supply chain chaos follows.
• Shipments delayed: In today’s complex supply chain, if one node stops or slows down, the entire end-to-end supply chain is impacted. For example, there can be several manufacturers, suppliers, distributors, transportation partners, and customers negatively impacted and scrambling.
• Customer & consumers negatively impacted: Delays throughout the system similar to the pandemic could result.
• Critical supplies impacted: Beyond nice-to-have purchases, supplies impacting healthcare, national security and food will be impacted.

Listen to my interview on FOX5 about the potential UPS strike.

What to Do?

The answer is not to rely on hope!

Instead, you should follow a few uncommon common sense best practices to mitigate the supply chain impacts:

• Backup partners: Ensure you have backup suppliers/ transportation partners. Remember, you cannot have a backup supplier in name only. To be successful, you must be working with your backup suppliers on a continual basis and giving them at least 20% of your volume.
• Backup modes of transportation: Instead of air freight, you should be reviewing backup modes of transportation. This won’t make sense for piece shipping (e-commerce) although you should explore and be aware of your options.
• Reevaluate your supply chain network: It is time to take a fresh look at your complete supply chain network, simply due to the exacerbated risk factors in the global supply chain. Make short term tweaks and build a resilient supply chain for your long-term competitive success. There are countless ways you can mitigate these types of risks while creating a resilient network.
• Be a partner of choice: Simply looking at price will no longer cut it. It never did but companies were able to get by. You must find collaborative win-win relationships to succeed in the modern supply chain.

Please contact us with stories, issues, and opportunities on what you’re doing to free up the mind and create a culture of innovation. And, please keep us in the loop of your situation and how we can help your organization get in a position to thrive for years to come. Learn more about these topics in our blog and download your complimentary copy of our recently released special report: The Road Ahead: Business, Supply Chain & The World Order.

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Lost Volume at the West Coast Ports

According to PMSA (Pacific Merchant Shipping Association), the five big West Coast ports have lost volume – 702,083 fewer loads and empties were handled in January and February 2023 than in the same period pre-pandemic in 2019. This equates to close to a 16% reduction. Specifically, the Port of Long Beach was off by 18.7% from January 2019 which was the lowest volume of inbound loads since January 2012 (except for 2015 when labor disputes created issues). The inbound volume is even worse at 20.6% at the San Pedro Bay port complex. These are significant differences, and successful clients are paying attention. Instead of responding, these clients are creating these changes.

Volume Is On the Move Eastward

PMSA reported that the East Coast ports grew business by 5.6% since 2019, surpassing the West Coast ports volume. The Gulf Coast ports started from a small base but grew by 49.1% since 2019. Clearly, volume is on the move eastward.

What Has Caused the Move?

The smart are reconfiguring their supply chain to succeed in the year’s to come. Specifically, we see smart executives moving volume for the following reasons:

• Threat of port strike / labor disputes: Executives are worried about the potential for a strike and/or other negative impacts from labor disputes. According to the Wall Street Journal, labor tensions are increasing in stalled talks at the West Coast ports. There are several issues being negotiated, and the two parties still seem to be far apart. For example, automation is a major issue in labor negotiations. On the other hand, US ports rate low for automation overall. According to APM Research Lab, the US ports are the lowest ranked ports in total port hours per ship call whereas Saudi Arabia and China are in the highest ranked group.
• Service failures during the pandemic: Executives remember the agonizing service issues and delays they experienced during the pandemic, and they are taking control of their customer experience. Some are re-routing goods through the Panama Canal to the East Coast ports, others are shipping via air, etc.
• Inventory gluts: Purchasing groups panicked when service failures, delays and shortages were commonplace, and overordered. On the other hand, it wasn’t “all their fault” because demand signals were showing ever increasing volumes as customers also thought JIC (just-in-case) was a much better strategy than JIT (just-in-time). Unfortunately, unless you follow proactive, intuitive SIOP (Sales Inventory Operations Planning), also known as S&OP and specifically demand planning processes, you will order the “wrong” products. Thus, there is an inventory glut of the “wrong” products in the “wrong” place at the ‘wrong” time.
• Reconfiguring manufacturing operations: As clients realize that they can no longer be dependent on China and other non-friendly nations to supply critical manufacturing goods, they are reconfiguring and reallocating production. Volume has been moving to Vietnam for many years, and India has been gaining steam in recent years. Thus, products have been moving across the Indian Ocean, through the Suez Canal, potentially stopping in the Mediterranean or Europe, and across the Atlantic to the East Coast. Others are taking matters into their own hands and reshoring production to the US and near-shoring production to Mexico / Latin America.

What are the Successful Doing?

The successful are taking control of their supply chain and proactively figuring out how to pivot and evolve to ensure growth and success. Thus, they are in essence creating this disruption; not responding to this disruption. On the other hand, moving volume isn’t always the best option. Review your situation, understand what your ideal customers will need, and CREATE a supply chain to serve your customers successfully, profitably and with the least amount of cash (inventory) tied up unnecessarily.

Our best clients are reallocating manufacturing, reconfiguring logistics, innovating and creating completely new solutions, leveraging technologies in new ways, and flipping the status quo on its head. What got you “here” (in the last few decades) will not “get you there” (to a successful future) anymore. The world is changing, and the resilient are pivoting, reconfiguring, and thinking differently to stand above the crowd.

Please keep us in the loop of your situation and how we can help your organization stack the deck to not only survive but also to be prepared to take advantage of the vast opportunities to come in the next several years. One great way to start your journey is to roll out a SIOP process to better navigate the volatility and uncertainty. Learn more about how to use SIOP to succeed during volatile times in our new eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. Download your complimentary copy.

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Originally posted in Adhesives and Sealants Industry in February of 2023

Transportation has been in chaos since the pandemic. It started with logjams at the ports that persisted for multiple years, continued with atypical events such as the ship getting stuck in the Suez Canal and truckers blocking the border of US and Canada, and continues to rage on with labor shortages across the board in rail, trucking, and all transportation sectors. Although these specific transportation woes will eventually come to an end, since the supply chain is interconnected, new disruptions will arise. Instead of responding to each issue, the best will use a proactive approach to successfully navigate and stand out from the crowd with high service levels.

The transportation woes have certainly proven the importance of the transportation sector. If materials and ingredients don’t move, nothing will be produced and shortages such as the baby formula and children’s Tylenol shortage will persist. If fertilizer and food doesn’t move, grocery store shelves will be bare. If chemicals are not transported by rail, purified water will become scarce and medical devices will not be produced (as anything with plastic will be an issue). The one common element in every supply chain is the need to transport materials and goods from point A to point B. Thus, what could be more important than taking the proactive approach to navigating transportation woes.

Reshaping of Supply Chains

Do not assume that what worked in the past will work in the future. There is a reshaping of supply chains taking place. Supply chains are on the move. For example, manufacturers have realized they cannot rely on China and are reshoring, nearshoring, and friendly-shoring their supply chains. They are also sourcing new partners, putting backup suppliers in place, and derisking their supply chains. Distributors and retail has also realized they must take action to avoid the fiascos that occurred in recent history. For example, they are moving freight from the Los Angeles and Long Beach ports to the East Coast ports to avoid a potential port strike and backlog at the ports. Consumers have shifted to e-commerce, accelerating the need for last mile delivery. The only element staying the same is level of change.

Proactive Approach to Successful Navigation

Start by taking the long-term view and be willing to confront the realities of the changing landscape. Before jumping on the low price bandwagon as prices decrease across the transportation sector, think about the impacts of the reshaping of supply chains. As supply chains move, the transportation needs will evolve and change, creating further disruptions. Instead of negotiating price with potential suppliers, source reliable partners that will scale and adjust with your changing needs and who will provide the appropriate level of service for your target customers. Find win-win strategies to innovate, collaborate, and drive joint profitability.

Take a step back and assess your ideal customers’ future state needs. Using a SIOP (Sales, Inventory, Operations Planning), also known as S&OP, process, match these needs with your transportation capabilities, capacities, and contingencies. Proactively reshape and disrupt your supply chain and transportation infrastructure before it disrupts you. Change modes of transportation. Source new partners, divert resources to new regions, collaborate with unlikely bedfellows such as competitors, and secure resilient capacity when everyone else is cutting back. Success will follow if you persist.

It is no longer sufficient to respond to transportation disruptions. The resilient and strong will survive, yet the proactive and innovate will thrive. There will be more opportunity than any period in history including those who leapfrogged the competition for decades to come during the Great Depression. Think ahead, be proactive and create your future supply chain and transportation capabilities while your competition is securing a ten-cent price decrease. You will be uniquely positioned to grow and thrive.

Learn more about how to use SIOP to succeed during volatile times in our new eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. Download your complimentary copy.

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There has been a lot of conversation about railroads lately. Why should we be concerned about keeping the railroads moving?

• $2 Billion a DAY: If the railroad strike occurred, it would cause $2 Billion dollars a DAY of economic damage. In the first half of 2022, 75,000 rail shipments started their journey each day, and they would sit idle.
• 467,000 long haul-trucks per DAY to offset: There simply aren’t the trucks or truck drivers to supply 467,000 long-haul trucks per day.
• 40% of US freight: The railroads haul about 40% of the nation’s freight.
• Impacts on chemical manufacturing & refineries: A chemical industry trade group estimated that if a strike continued on for a month, 700,000 manufacturing jobs would be lost as they would have to idle capacity and shut down operations.
• Shortages related to chemical manufacturing: Purified water, anything made from plastic (thousands of items…..), gas, carbonate soda and beer, and the list goes on.
• Stranded train passengers: At least 50% of the commuter rail systems rely at least in part on tracks that are owned by the railroads.
• Fertilizer: Fertilizer has been scarce since the Russia-Ukraine war since a lot of fertilizer was sourced from that region to supply the world. One of the largest producers in the US was near the eye of the Florida hurricane, and fertilizer is transported by rail. Fertilizer is already of grave concern and inflated prices.
• Food shortages: 30% of packaged food is moved by rail. Also, certain products’ operations are built around raw material deliveries by rail (grain, barley, peanuts).
• Impacts on meat production: Herds rely on rail to deliver their feed via rail.
• Retail impacts: UPS and FedEx also use rail to transport goods. Additionally, UPS uses rail to keep its Chicago area consolidation hub on schedule.

Automobiles: 75% of new cars move via rail.

Strike Averted

A strike would have been economically devastating, and so Congress passed legislation requiring the railroad workers to live by a tentative agreement that the union leaders worked out with the railroad companies. 4 unions had rejected the deal because of the lack of sick days and flexibility; however, the law will now require employees to work. A rail strike was averted, but will there by lasting implications?

But Issues Remain….

Rail is the current bottleneck in the supply chain. The railroads have been reducing the number of employees over the last several years as they have become more efficient. CSX implemented an improved process called Precision Scheduled Railroading in 2017, and most railroads have followed their lead or implemented other changes that have led to reduced costs. Since this timeframe, 22% of the jobs at Union Pacific, CSX, and Norfolk Southern have been reduced.

Precision Scheduled Railroading is in essence a lean scheduling system for the railroads. Instead of waiting for full trains (ideally with the same type of product in all cars), the system focuses on moving cars. It is a first-in, first-out model that keeps rail cars – and supply chains – moving. Also instead of waiting on long runs (long trains), rail cars will be picked up as scheduled, thus improving service. Similar to JIT (just-in-time), companies took JIT literally (even though that isn’t the true intention of JIT), Precision Scheduled Railroading makes sense to improve efficiencies and service, but the staff reductions don’t have to be in full alignment with the improvements.

Then, as the pandemic started, similar to most businesses, the railroads furloughed workers. However, as spikes in demand occurred as business increased, it hasn’t been as easy to get workers back. Also, because of the nature of the business, the railroads must run 24/7. Thus, the conflict with sick time and flexible time.

Thus, rail is the current bottleneck.

• 26,000+ containers sitting on the docks waiting for rail: This is around 3 times as many as there were prior to the pandemic.
• Rail delays/ extended lead times: A survey by Benedict’s trade group shows that all of its members had rail shipments delayed for 3 days or longer.
• Retail theft: There has been a dramatic increase in retail theft at the railyards in L.A. and it is a recurring issue. Unfortunately, according to the L.A. Times, Union Pacific said that the county’s approach to low-level offenders has exacerbated the problem.
• Dramatic increase in embargos: Union Pacific and BNSF Railway have issued more embargos, restrictions placed on the amount of cargo that can be transported, in 2022. Between January and November, they had 1500 embargos which is between 60% and 130% greater than 2020 and 2021.

The Railroad Labor Deal Passed by Congress

The Congress deal provides 24% pay increases over five years, immediate payouts averaging $11,000 upon ratification, and an extra paid day off. It will certainly contribute to inflation. On the other hand, once the workers get the payout, will they stay? There are some concerns over a worsening situation. Of course, as compared to the railroad strike scenario, it was a tradeoff Congress chose to take.

What’s Next?

Unfortunately, the railways are having the same issues as everyone else in hiring workers to fill key roles. Undoubtedly, the railroads will work through the bottlenecks eventually as they realize the service complaints are getting louder and louder. However, since the supply chain is a system of systems, the bottleneck will move to the next link in the supply chain. Are you preparing for the current issue or thinking ahead?

Also, since the unions gained headway, the question is whether this issue will impact other unions such as the port labor negotiations. Concerning times…..

The only path forward to take control over your success is to take control over your supply chain. Know your partners, choose wisely, insource where it makes sense, think ahead, innovate, and be the disruptor instead of the disrupted.
Please keep us in the loop of your situation and how we can help your organization thrive during these times of volatility and disruption. There will be more winners created than at any other time than since emerging from the Great Depression. To gain additional ideas and insights on how to best navigate these volatile times and thrive, read our new eBook Thriving in 2022. Learning from Supply Chain Chaos. Download your complimentary copy.

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Originally posted by JILLIAN SMITH | The National Desk, Wednesday, November 30th 2022

House Speaker Nancy Pelosi said she’s putting everything on track for an early vote to quickly send the bill to the Senate and have the legislation approved before the Dec. 9 strike deadline.

If the more than 100,000 affected rail workers walk off the job with no deal, the U.S. economy could face another devastating blow.

Supply chain consultant Lisa Anderson says many manufacturers are concerned that the strike could cause further disruptions to their manufacturing operations.

“You know, there are concerns about all the food that moves by rail and in the automotive industry, there are concerns about what moves you know, the cars and the parts,” Anderson said. “So, there are concerns across the board about further supply chain disruptions.”

She says she is advising many companies to be prepared in case a deal isn’t reached by the deadline.

FILE – Surveyors work next to Canadian Pacific Rail trains which are parked on the train tracks in Toronto on Wednesday, May 23, 2012. Approximately 3,000 Canadian Pacific Railway conductors, engineers, train and yard workers represented by the Teamsters Canada Rail Conference will be returning to work on Tuesday, March 22, 2022, after an agreement was reached between the railroad operator and union. (Nathan Denette/The Canadian Press via AP, File)

“Definitely advising them to take proactive action with anything critical like let’s say materials that they are counting on to keep manufacturing operations going,” said Anderson. “If it’s critical, if it’s the only source of supply and advising them to, you know, send it by truck or send it by plane.”

The major challenge with the potential strike concerns products, materials and components that keep manufacturers running. It’s not yet known when Americans could be dealing with any supply chain disruptions but Anderson says it’s possible that the impacts could be seen within a week following the strike, if not sooner.

“In some industries, we’re going to start to feel supply chain disruptions immediately because folks are stopping their transport via rail in advance because they know that they’re not going to be, you know, available potentially available at the right time,” Anderson said.

She says if rail shipping stops, it would hit across the board.

“Unfortunately, the products that are transported by rail go into countless products,” Anderson said. “Certainly in the food industry, there’s going to be, you know, grain and some of the other food items that are transported via rail it’s going to show up immediately.”

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“A tentative agreement announced Thursday looks likely to head off a strike that would have brought freight trains across the U.S. to a screeching halt. But the concern generated by the possibility of such a disruption highlights how fragile the nation’s supply chains remain 2 1/2 years after they were first upended by the COVID-19 pandemic.

The breakthrough in negotiations was announced by Labor Secretary Marty Walsh, who hosted talks between unions representing 115,000 railway workers and the country’s largest railroads. If the unions accept the deal, workers will get double-digit raises, more flexible attendance policies and other benefits. President Biden called the agreement a win for rail workers who worked through the pandemic “to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years.”

“Unfortunately, I just don’t see anything in the next year or two that’s going to lessen the number of disruptions,” says Lisa Anderson, a supply chain expert and president of California-based LMA Consulting Group.

A rebound in demand since the worst days of the pandemic and supply disruptions due to the war in Ukraine combined to drive up the price of gas to unprecedented levels earlier this summer.”

Click here for the full story.

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