A Looming "Catastrophic Shock" to Supply Chains
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As you’re probably aware, Hollywood is completely shut down right now because both the writers and actors are on strike.
But there are a couple more strikes coming up that will affect you if they happen because they’ll shut down a great deal of our supply chain: UPS and Yellow.
Photo by Daphne Fecheyr on Unsplash
Craig Fuller, CEO of Freightwaves, said, “A Yellow shutdown (almost certain) and UPS strike would be a catastrophic/unprecedented shock to supply chains. Massive volatility, across all modes.”
If you haven’t heard of Yellow Transportation, they hold about 10% of what’s known as the less-than-truckload (LTL) business. Yellow has been hemorrhaging cash for years, and is now on the verge of bankruptcy. On top of that, the Teamsters are close to a strike—as soon as Monday—because Yellow has stopped paying into the pension fund. That has caused customers to drop Yellow, making matters even worse.
Meanwhile, the Teamsters are also butting heads with UPS, although the situation there looks somewhat more optimistic than Yellow: From The Washington Post:On Wednesday, UPS and the Teamsters, the union representing UPS workers, announced that after a two-week impasse, they had agreed to resume negotiations next week with time running out before the Aug. 1 deadline.While the two sides have resolved most of their issues, with UPS agreeing to install air conditioning in vans and eliminate a lower paid class of workers, they remain at odds over pay and benefits for part-time workers who make up more than half of UPS’s workforce.“I think it’s likely a work stoppage will occur and the key question at this point is how long it will last,” said Alan Amling, a fellow at the University of Tennessee’s Global Supply Chain Institute and a former UPS executive.
And UPS workers are already staging dress rehearsals for a strike:
As the strike deadline has neared, so-called “practice pickets,” or dress rehearsals for the potential strike, have sprung up outside UPS facilities from Hawaii to New York, with hundreds of Teamsters UPS members in brown work uniforms marching and chanting: “What do we want? Contract!”
All of this really hinges on what UPS and the Teamsters decide on in this week’s upcoming contract negotiations. While the industry is well-prepared for Yellow’s downfall, it’s not prepared for a shutdown of Yellow and UPS at the same time:
His projection of how a UPS strike would play out foresees that LTL carriers would be “flooded with freight opportunities.” Volume also would “show up” at FedEx, the U.S. Postal Service and parts of the DHL network. But the problem is that “they simply aren’t going to have the capacity” to handle the freight moving out of the UPS network.
Bottom line: if you have anything sitting in your online shopping carts, now would be a good time to buy it.
And if you’re a trucker or mechanic in the business, Freight Waves has advice on how to prepare your shipping company going bankrupt. If you work for Yellow, take your tools home now!
Article was originally from unprepared.life
