Labor Unions

The People First Newsletter: Labor Unions Cast a Long Shadow on Supply Chain Health

JJ Singh

People are and will always remain a core aspect of any supply chain operation. Across North America, they are making their voices heard as labor unions and shipping stakeholders tither on the verge of strikes that could throw different supply chains across multiple industries into a world of chaos.

Join us as we explore the latest news and trends surrounding the logistics and supply chain industry and the people within.

ILA Dockworkers at Ports From Boston to Houston Halt Labor Talks

The dockworker union’s negotiation on the East and Gulf Coasts is off to a bad start, and unsurprisingly, the issue centers around automation. Talks slated for June 11 have been put on hold because the unions believe that a certain shipping terminal is violating the current contract by increasingly leveraging automation.

The communication breakdown is particularly troubling because it comes just less than four months before the current pact runs out, raising concerns about a potential strike that could disrupt supply chains across the East and Gulf Coasts while the peak shipping season could be in full swing.

Another concern about the breakdown is that it is happening at a time when overall volumes reaching the US ports are creeping up. With the ILA trade union being the largest of its kind in North America, there may be very little these supply chains can do if it comes to a strike or halt of operations. Although seaport labor strikes are rare, the ‘what if’ tensions and anxiety are common and can run high. That is primarily because any slowdown of operations can reach billions of dollars in adverse impact.

Orders for New Class 8 Trucks Strong in May, ACT and FTR Data Shows

The FTR and ACT reported a surge in orders for new Class 8 trucks across North America for May 2024. While FTR reported nearly 19,000 net orders, ACT Research's numbers were even higher at 23,200. FTR report shows a 25% increase from April and 37% year-over-year. For its part, the ACT’s numbers show 46% month-over-month and 49% year-over-year.

The common denominator between both reports is the surprisingly strong numbers that beat expectations across the industry, particularly when the trucking industry is facing quite a bit of turmoil or volatility. Analysts and experts think that these numbers could be pointers to the market returning to a more normal level of replacement buying following a period of high demand.

Despite the strong numbers, mixed signals plague the future. FTR says order activity still exceeds replacement levels, while ACT Research points out that the typical seasonal slowdown could still play out. According to Magnus Koeck, vice president of strategy, marketing and brand management at Volvo Trucks North America, stronger-than-anticipated numbers can be attributed to several factors, such as OEMs opening their remaining order board slots for 2024 and the private fleets slowly starting to engage in an early 2027 pre-buy.

Strike Averted after Canadian Border Workers Reach Tentative Contract

A potential strike was averted in another major North American union. The Canada Border Services Agency (CBSA) workers were slated to stop work on Friday, June 14. Having gone without a contract for more than two years, the border services employees sought wage parity with other law-enforcement agencies, such as the RCMP.

The employees also wanted job security, flexible telework arrangements for those who could work from home, and a commitment to better retirement benefits. A tentative agreement between the government and the union was reached on Tuesday, June 11, preventing a work stoppage.

The new agreement includes wage increases and other benefits for the over 9,000 CBSA workers, but specific details are yet to be released. Both parties (union and government) are urging ratification of the agreement, which would impact about 11,000 CBSA employees, including border crossing officers, intelligence officers, and non-uniformed staff.

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