Port strike on Canada’s west coast sparks supply chain panic

The holiday season is quickly approaching. But this year’s excitement could be overshadowed by the threat of major trade disruptions due to ongoing port strikes.

British Columbia Maritime Employers Association (BCMEA) blocked over 700 craftsmen in the ports of British Columbia. These disruptions coincide with an ongoing strike at the Port of Montreal – the largest port in eastern Canada – which is already facing partial closures affecting 40% its container transportation.

It’s not hard to imagine how delivery delays could accumulate, potentially disrupting critical international supplies, causing serious economic problems for businesses and consumers.

Ripple effect of a strike

West Coast ports are a powerhouse, handling approximately $576 million in daily trading and plays a vital role in North America’s port, railroad and road transportation networks. However, a prolonged strike could throw this well-oiled machine out of whack, causing a ripple effect throughout the supply chain.

History serves as a reminder: last month, a three-day strike involving more than 47,000 dock workers affected 36 US portsThe resulting backlog of ships waiting to unload cargo is expected to disrupt local and international supply chains for several weeks.

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With cargo activity already affected, vital international shipping is at risk, which could lead to significant economic losses for various industries. This situation could worsen supply delays and bottlenecks for businesses, increase transportation costs, and potentially lead to the closure of factories and factories that depend on the delivery of their products.

It’s not just the big players who will feel the heat. small and medium business are likely to be hit hardest by a lack of contractual flexibility compared to larger companies, making them more vulnerable to cost increases and delays when delivery plans change.

For distributors serving multiple retailers, even a small delay could mean they are unable to meet their contractual obligations, which could result in penalties.

While consumers may not notice immediate shortages on grocery shelves or in stores, if this labor dispute drags on for weeks, they could soon feel the effects as prices rise and availability drops.

Supply chain strategies for fully stocked shelves

Since this is not the first or last supply chain disruption, implementing supply chain best practices is essential to effectively addressing these issues. Here’s what companies can do in the long term and in the short term:

Increased visibility is essential for making informed and flexible decisions. Rising costs associated with backlogs are just one issue; Unforeseen incidents may also occur. Because who would have thought that a lithium-ion battery caused a fire after an overturned tractor trailer that burned for days and temporarily closed the ports? But with increased transparency, companies can make quick and informed decisions to mitigate the impact of such unexpected events.

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By integrating scenario planningorganizations can develop individual strategic responses to different scenarios by analyzing historical data on strikes and other disruptions to understand their potential causes.

Changing the route and alternative delivery methods widely used strategies. For US port strike in OctoberMaersk and Hapag-Lloyd have introduced local port charges on cargo moving to and from the affected terminals. Some shipping companies have begun rerouting ships to alternative ports, resulting in longer transit times and additional shipping costs, but at least there are no disappointed customers. Instead of relying solely on sea freight, a quick solution may be to switch to air freight if possible.

Cross-functional and clear communication is critical in times of uncertainty as no business can do it alone. Providing regular updates on potential delays can help manage expectations and maintain customer relationships. Clear communication is critical in times of uncertainty as it ensures that both suppliers and customers are kept informed of the situation. After all, who wants their order to remain in the same status for two weeks without any updates?

Inventory optimization strategies help protect against supply chain disruptions by determining the optimal inventory level for main parts and products. Using advanced and Demand forecasting based on artificial intelligence With the tools, companies can better anticipate consumer needs and strategically position inventory closer to customers. This way, even if main distribution channels are disrupted, businesses will be able to fulfill orders quickly.

Behind those shelves filled with products lies a network of well-balanced long-term and short-term strategies that make it all possible. By taking proactive measures to mitigate the impact of strikes and similar events, businesses can not only protect their interests, but also contribute to more stable and sustainable supply chain ecosystem.

To learn more, download the IDC Infobrief: The Importance of Artificial Intelligence in Supply Chain and Operations