Transport strikes again put supply chains under pressure
This isn’t just about a potential US railroad strike endangering supply chains. Air traffic controllers in France are taking leave on Friday and dockers at two major British ports have scheduled work stoppages.
The pandemic, a giant freighter stuck in the Suez Canal, floods and droughts, and labor shortages have created two years of havoc for businesses and consumers who rely on freight shipments. Now, the potential disruptions come from within. Labor, emboldened by a tight labor supply amid high demand and continued shipping delays, and expecting to be compensated for the sacrifices made to keep economies going for the COVID, believes that it has a leverage effect.
Workers at the ports of Felixstowe and Liverpool are preparing to strike in the UK, and the actions will overlap.
Unite, the union that represents dockworkers at the Port of Felixstowe, has scheduled a work stoppage from September 27 to October 5. Stevedores also went on strike for eight days in August.
Felixstowe is a major port, handling around 48% of all containerized imports into the UK
Union leaders say Felixstowe Dock and Railway Co. and its Hong Kong-based owner, Hutchison Port Holdings, only offer a 7% raise when UK inflation is above 12%.
Unite also said Port of Liverpool longshoremen will not report to work from next Monday until October 3 in a dispute with Peel Ports Group over pay. Peel Group says it has offered a salary package equivalent to an 8.3% raise.
Logistics company CH Robinson has also alerted customers that port operations will be suspended or reduced on Monday as a mark of respect for Queen Elizabeth II’s funeral.
During strikes, he noted, deliveries by truck will also be severely limited and temporary storage fees could be charged for goods that cannot board a vessel or leave port property.
In Germany, unionized workers and the bargaining unit for management in Hamburg and other ports have reached an agreement on a 9.4% wage increase after several rounds of contentious negotiations that nearly led to a strike but were postponed by a court ruling in July.
Meanwhile, talks between terminal operators and the International Longshore and Warehouse Union, which represents US West Coast dockworkers, have stalled. The ILWU has pledged not to go on strike, but there are growing fears that informal labor slowdowns could intensify. Major sticking points include a local dispute with the Port of Seattle/Tacoma and automation, with Southern California workers not working on ships calling at the automated section of Pier 400 in Los Angeles, the report reported. Wall Street Journal.
Against this backdrop, major U.S. freight railroads have imposed an embargo on many types of freight and are preparing to shut down on Friday after failing to reach a collective bargaining agreement with two major unions. The prolonged strike could exacerbate intermodal congestion and inflation in the country, analysts said.
Stevedores in Europe and the United States say shipping lines and port terminals have reaped huge profits since the COVID crisis and should now share more of that wealth.
Air traffic control litigation in France
The DGAC on Friday asked all airlines operating in France to cut their flight schedules from all French airports by 50%, as the main union representing air traffic controllers in France called for a one-day strike.
Air France announced on Wednesday the elimination of 10% of its long-haul flight program and 45% of its short and medium-haul flights.
Data from Cirium shows there are more than 1,800 flights scheduled in France on Friday, most of them on intra-European routes, reports SimpleFlying.
The DGAC said it was working with navigation regulator Euronav to help airlines avoid the country’s airspace. Bypassing French national airspace could put a strain on airline operations across Europe.
The industrial action is scheduled to last from 06:00 Friday to 06:00 Saturday. Air traffic control union SNCTA cited the need for higher wages to cope with inflation and more hiring as reasons for the strike.
The impact on air freight is expected to be modest given the short duration of the strike. Air France is also maintaining most of its international flights, which carry the bulk of air shipments booked with the airline.
It is the latest in a series of industrial action that have contributed to a bumpy summer of congestion and thousands of flight cancellations for travelers and shippers in Europe. Airports such as London Heathrow and Frankfurt in Germany have capped daily passenger numbers to prevent the system from bogging down.
In July, Lufthansa ground staff walked off the job for a day before the parties resolved their differences. A last-minute deal between the pilots and the German airline averted a two-day strike last week. The cabin crew of the Spanish operator Iberia Express carried out a work stoppage this summer.
In Australia, airport ground handling company dnata recently reached a tentative agreement with workers that prevented a 24-hour work stoppage at major airports.
Typhoons, heat waves, COVID shutdowns and geopolitical tensions in Southeast Asia have also hampered airline operations.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Lufthansa cargo shipments slowed by German ground staff strike