Supply Chain Constraints Worsening
Just when you thought the impacts of COVID-19 were starting to wear off, unions have decided to flex their industrial muscles and have undertaken a series of go-slows and stoppages on Australian waterfronts. These actions have been designed to affect ports at the very time businesses that rely on the ports, and the ports themselves, are having to isolate individuals due to COVID infections. Up to 20 percent of the ports’ workforce is being forced to isolate due to the virus. The union is invoking 12-hour stop-work actions every three days every week for an indeterminate period, which in its own right seems to add another three days to port clearance times – an almost one-third additional lead time.
This is exacerbating the current worldwide supply chain disruptions. The situation in the US is so bad that President Biden has enacted legislation to force the port of Los Angeles to operate 24 hours a day to clear the massive backlog. As of Tuesday last week, more than 100 ships were waiting to enter the port. Whether this legislation is smart policy or not is debatable. I think it is misplaced. However, the fact that the situation had reached such a point as to warrant intervention by presidential decree highlights the negative impact these disruptions are having on the economy in general and on individual businesses more specifically – especially if you are one of them.
Closer to home in Australia, Wallenius has stopped calling into Fremantle because of industrial action. The reason for all this action? A major push by unions for certainty of employment in increasingly uncertain times.
The biggest lesson from the pandemic, in my opinion, is that strategies have to be rethought. If you have not conducted a strategic rethink, you are not being proactive. Yesterday’s strategy will not work in today’s business environment.