The International Longshore and Warehouse Union (ILWU) is still firmly planted in the old school union belief that hostage taking is a means to deliver steady employment to their members. By taking physical control of production assets, they are hoping to force management concessions. And while this approach worked in the industrial 20th century, it does not bode well in today’s economy.
The shift has already started away from the ports of Long Beach and Los Angeles. Companies are losing money as their goods are held hostage both inbound and outbound from these ports. As companies react to these roadblocks, the thinking and forecasting they are doing is not centered around planning for higher costs, but rather, avoiding these ports altogether. The overall direction seems to be to re-shore most or all of their manufacturing for some combination of cost, risk and market responsiveness improvements.
“Today’s global supply chain is incredibly agile and emerging technologies will keep feeding this trend. …global supply chain strategists are already designing their way around the west coast port bottleneck. Chances are good that traffic through LA/Long Beach has already peaked and is now in decline.” states O’Marah.