Once again, managing a global manufacturing supply chain resembles a game of whack-a-mole, particularly in relation to shipping lanes, as published by ET.
Tentative agreement
The International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) have reached a tentative agreement for a new six-year contract, ending a period of uncertainty at 29 ports along the West Coast of the United States. The details of the agreement have not been fully disclosed, but it comes as a surprise after recent souring negotiations. The PMA had expressed concerns about worker actions affecting operations, while the ILWU disputed some of the allegations. Although disruptions had a limited impact, delays were starting to accumulate.
Exploring alternate routes
In anticipation of potential slowdowns at West Coast ports, manufacturers and retailers are diverting their cargo to Canadian gateways or exploring alternative routes such as the Panama or Suez canals to the US Gulf Coast or East Coast. This trend reflects a broader shift towards building redundancy throughout the supply chain. Merely having a single factory in Asia is no longer sufficient for US industrial companies; they now require multiple plants, including those within close proximity to North American markets. Moreover, companies are increasingly seeking backup options, especially for critical components, and finding alternative solutions to address semiconductor shortages. The transportation sector is also affected, as industrial companies can no longer rely solely on their traditional shipping routes. The post-pandemic world necessitates having multiple options available.
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Source: ET
