What’s behind the summer of supply chain labor unrest?0 (0)

What’s behind the summer of supply chain labor unrest?
0 (0)

August 17, 2023

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An extended stretch of labor unrest has sowed uncertainty throughout transportation modes, adding further incentive for shippers to firm up their supply chain contingency plans.

From disruptions at West Coast ports in the U.S. and Canada to UPS and Yellow’s dust-ups with the International Brotherhood of Teamsters, disputes between unions and employers have been a recurring threat to the steady flow of goods in recent months. They’ve sparked container backlogs, shifts in carrier mix, and pleas for quick resolutions as companies battle-tested by the COVID-19 pandemic work to minimize risk.

Labor disputes aren’t a new hurdle for supply chains, and each employer-union clash has its own unique blend of history and demands attached to it. But one particular factor exerts a strong influence over recent conflicts: Workers are seeking much stronger pay, benefits and protections in new deals they believe are appropriate for the sacrifices they made during the pandemic and amid current inflationary pressures.

Strike threats and other labor actions are hitting supply chains as workers across industries seize power during what’s been dubbed a “Hot Labor Summer.” Unionized TV and film writers, hotel and hospitality employees, and auto workers have been among those pushing employers for better pay, protections and working conditions.

“The question is, is this a movement or a moment?” said Mark Gaston Pearce, executive director of the Workers’ Rights Institute at Georgetown University Law Center and former chairman of the National Labor Relations Board.

Pandemic’s long tail, economic growth empowers unions

Brandy Harris, a part-time UPS employee in Seattle, recalls the around-the-clock work involved to keep packages flowing when volume surged in the pandemic’s early days. While other businesses shut down, UPS workers helped deliver vaccines and protective gear to fight against COVID-19’s spread.

Three years after the pandemic first took hold, the Teamsters — which represent around 330,000 UPS employees — won a “historic” tentative contract agreement with UPS. Harris, part of the union’s negotiating committee for UPS contract discussions, endorsed the deal that came days before the existing five-year contract’s expiration.

“It was something that we had been fighting for a long time,” Harris said of the tentative agreement, which averted a potential strike. “After COVID, we really wanted to see some respect from the company.”

Other employer-union contract battles have emerged since 2022 as a flood of existing agreements have approached their expiration dates. These include talks on deals covering U.S. West Coast dockworkers, rail workers, FedEx Express pilots, TForce Freight workers, Sysco drivers, Boeing supplier Spirit AeroSystems and railroad equipment manufacturer Wabtec.

Signs with messages such as

Signs with messages such as “Yes to Rail Unions! No to capitalist politicians!” are seen in front of the U.S. Capitol.

Anna Moneymaker via Getty Images

 

The timing of these negotiations generally favors labor unions, according to Todd Vachon, an assistant professor at Rutgers’ School of Management and Labor Relations. Despite challenges with inflation, the U.S. economy has shown strength with a low unemployment rate and consumers continuing to spend.

“You’re always in a better position as a union if you’re coming into bargaining during a strong labor market with low unemployment and economic growth chugging along,” Vachon said.

While established union workforces are securing new contracts, other employee groups in the transportation sector are organizing.

More than 1,100 DHL Express workers at Cincinnati/Northern Kentucky International Airport voted to join the Teamsters in April. Drivers and dispatchers at an Amazon delivery contractor, Battle-Tested Strategies, organized with the Teamsters and ratified a union contract that same month. But Amazon terminated its relationship with Battle-Tested Strategies, and the newly organized workers began a strike for reinstatement and contract recognition by Amazon that has been ongoing since June.

The Teamsters are still looking to unionize other employees involved in the logistics giant’s network. Randy Korgan, director of the Teamsters Amazon Division, believes the time is ripe to do so.

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