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September 27, 2024
Surviving US Port Strikes: Building a Resilient Supply Chain
By Daniel Wang
September 27th | 4 min read
The threat of US port strikes on supply chains continues to loom large. To safeguard operations and minimize disruptions, organizations must prioritize building robust supply chain resilience. This article outlines key strategies to enhance supply chain effectiveness and prepare for potential US port strikes, ensuring operational continuity and mitigating negative impacts.
Upcoming Port Strikes: The Ultimate Test for Supply Chain Resiliency
As the anticipated port strike draws near, companies are preparing for a cascade of operational disruptions. Although direct effects may seem confined to the current timeframe, the ramifications ripple far beyond the duration of the strike itself. Experts predict that each day of a strike could lead to an additional five to six days before operations return to normal, creating a lengthy tail of consequences. To mitigate this, many organizations have already taken preemptive actions — container volumes have surged over the summer, and some have secured contracts for alternate shipping routes from the West Coast.
This event, however, is not isolated. It is part of a broader pattern of global supply chain disruption. Labor disruptions, such as the upcoming strike, are just one of many challenges modern supply chains face. Recent years have shown that disruptions are no longer rare, isolated events — they are now a persistent challenge that can cripple operations, damage profitability, and erode customer trust. Each disruption exposes the resilience of supply chains. The ability to pivot, adapt, and recover is no longer a competitive edge — it is a necessity.
The question is: How resilient is your network?
Assessing Supply Chain Resiliency
A resilient supply chain is one that can absorb unexpected disruptions while minimizing operational setbacks. To assess the strength and flexibility of your supply chain network, consider these critical areas:
- Routing Flexibility: Can shipments be rerouted quickly in the event of a disruption, or do you risk costly delays and lost sales? Have you preemptively built out alternate routes with sufficient capacity? Do you have pre-existing agreements with multiple carriers that can be activated quickly?
- Supplier Diversification: Are you overly reliant on one supplier or region? Is there a vulnerability in your network that could trigger widespread disruption from a single failure point?
- 3PL Partnerships: Do your third-party logistics (3PL) providers offer the flexibility you need during periods of constraint? Are you overly dependent on these relationships? Are you vulnerable of being de-prioritized during industry-wide disruptions?
- Buffer inventory & Safety Stock: Do you maintain adequate safety stock across your network to cushion delays? Are stock levels appropriately balanced to manage availability without inflating carrying costs? Have you over-allocated resources, pushing inventory expenses unnecessarily high?
- Transportation & Service Costs: Have you accounted for the service-level impacts of rerouting shipments? Are multiple transportation modes and carriers readily available to mitigate any service gaps? What is the premium on this compared to regular operations?
- Network Sensitivity: How sensitive is your network to external shocks and internal growth objectives? Can your network sustain the impact of market shocks, industry disruptions, or new product lines?
Building a resilient network involves more than reactive contingency plans – it requires careful forethought and a comprehensive understanding of your current setup, risk areas, and potential stress points.
The Costs of Inaction
Neglecting to address these vulnerabilities could have severe repercussions. Short-term impacts may be limited to missed shipments and delayed deliveries but the long-term fallout could be much more damaging. Rising transportation costs from route switching, escalating storage expenses, and an increased backlog all eat into margins. Worse yet, customer satisfaction is at risk. Service delays could erode hard-earned trust, with long-term damage to brand loyalty and market share. Given the potential for the East Coast strike to compound these disruptions, the urgency to re-examine your supply chain resilience is clear.
The cost of inaction isn’t merely financial—it’s existential. Companies that fail to adapt could face long-lasting operational and competitive disadvantages. Those that invest in resilience now will be better equipped to thrive amidst uncertainty and future disruptions.
Options to Protect Your Supply Chain Network
If the upcoming strike has exposed gaps in your supply chain’s resilience, consider these strategic actions to protect your operations:
- Diversify Suppliers & Ports: Introduce redundancy into your sourcing strategy to reduce reliance on single suppliers or ports.
- Build Strategic Safety Stock: Position safety stock at key nodes to absorb shocks while balancing cost and availability.
- Strengthen 3PL Relationships: Utilize third-party logistics providers for additional flexibility, while maintaining control over core operations to avoid over-dependence.
- Implement Real-Time Analytics: Use advanced tools to gain visibility into supply chain performance, enabling quicker responses to emerging disruptions.
The upcoming East Coast port strike serves as a stark reminder that supply chain disruptions are now an ever-present reality.
Businesses that prioritize supply chain resilience will not only weather these challenges but gain a competitive advantage with an adaptable network. Assessing your supply chain’s vulnerabilities and taking proactive steps to build flexibility will help safeguard your operations, preserve customer loyalty, and protect your bottom line.
When navigating this new era of supply chain volatility, balancing risk against capital investment is key. If you’re uncertain about the strength of your network, it may be time to conduct a comprehensive assessment. Reach out to us at [email protected] or contact me directly to start a conversation on fortifying your network for the future.
Keywords: US Port Strike Supply Chain Resilience, Network Design Strategies, US Port Strike Supply Chain
Daniel Wang
Daniel Wang is a Director of Consulting at LIDD, leading our LA office in helping clients navigate complex challenges and achieve strategic success. With a deep background in warehousing and supply chain management, Daniel brings valuable expertise to LIDD’s Design & Strategy practice.
As a Director, he advises client leadership on designing efficient facilities, streamlining warehouse processes, and optimizing distribution networks across industries such as foodservice, CPG, apparel, mechanical parts, and utilities.
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By Charles Fallon January 5, 2015 | 3 min read Here are 5 things every supply chain professio...
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Amazon’s Robots and the Genius of a 44 Year Payback
By Charles Fallon November 27, 2014| 4 min read Amazon’s robots are getting flattering press....
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Big Data Hubris
By Charles Fallon November 12, 2014| 4 min read I was in a meeting recently with the transpor...
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Four Keys to a Successful Project
Discover the secrets to successful project management. This post outlines four essential factors: co...
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Amazon Hires 10,000 Robots
Amazon is doubling down on KIVA robots with a plan to deploy 10,000 units. But does this massive inv...
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Infrastructure: Supply Chain’s Missing Link
If you google the term “supply chain”, you’ll find dozens of definitions that say the same thing: th...
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Canada Post and the Value of Delivery Operations
The Canadian federal government's decision to eliminate door-to-door deliveries, even in urban areas...
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Dock Area – Door Design and Trailer Interaction
Explore the latest advancements in dock door design and trailer interaction to streamline distributi...
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Capital Wasteland
One of our clients needs 200,000 sq.ft in a specific corner of the United States. This week, the sea...
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Supply Chain Traceability: Lessons from E.Coli Outbreaks in BC
The recent e. Coli outbreak linked to raw milk cheese emphasizes the urgent need for effective suppl...
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Low Level Order Pickers
Improve warehouse picking efficiency with low-level order pickers. Learn how to maximize your wareho...
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Low Level Order Pickers
By Steve Zerter July 31, 2013 | 4 min read A distribution facility has reached the point wher...
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The Vicious Circle of Picker Congestion
By Charles Fallon January 25, 2013 | 2 min read SKU proliferation in food distribution has ge...
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3 Aspects within Management’s Control that Affect Productivity
By David Beaudet December 17, 2012| 3 min read When looking at the factors that affect produc...
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The Truth About Drive-in Racks in a Non-manufacturing Environment
The most important thing to consider before increasing storage capacity is whether or not you should...
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Ketchup in the Cooler – How to Know When You’ve Got One SKU Too Many
By Charles Fallon November 6th, 2012 | 2 min read Optimize Your Distribution Center: The SKU Rationa...
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Five Distribution Center Functions in Five Short Stories
By Charles Fallon November 6, 2012 | 4 min read 1. Receiving The DC manager of a Texas...
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How Pick Lines Affect Distribution Performance
By David Beaudet October 25, 2012 | 2 min read Talking about pick lines and their impact on d...
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How Pick Lines Affect Distribution Performance
Good consultants understand that decisions are rarely black and white, rather, they exist in shades...
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Three Dimensions of DC Capacity
By Charles Fallon October 15, 2012 | 2 min read In logistics, few things are more fundamental...
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Bad Barcodes Lose Sales
Earlier this week, a routine trip to Staples turned into a lesson on the importance of barcodes in r...
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Modeling Service Logistics
Learn how to effectively integrate services into your distribution network. Discover strategies for...
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eCommerce Piece Picking Operations: Optimizing High-Volume Distribution
Managing high-volume piece picking operations can be complex due to the need for efficient stocking,...