Labour unrest was major factor for supply chain disruption in 2022

Labour unrest was major factor for supply chain disruption in 2022

At least 38 strikes affecting ports took place last year

Strikes affecting major maritime gateways were a familiar scene in 2022. Labour action in Europe and worldwide took a heavy toll on port operations and the global supply chain. As food and fuel prices remain high in many countries, the risk of angry workers repeating last year’s scenarios is not improbable. Risk management consultancy Crisis24 reported that at least 38 strikes affecting ports took place last year. Dockworkers, rail workers and truck drivers all demanded better pay as prices of essential commodities increased rapidly. Felixstowe, UK’s largest port, came to a complete standstill as it was hit by strikes twice last year. Industry analysts noted that during the first five days of the strike, the waiting time for vessels at Felixstowe Port increased by 82%. The UK continues to witness strikes by rail workers affecting cargo and passenger movement across the country. In Germany, two 24-hour strikes at Hamburg Port caused major disruption to carrier schedules, negatively affecting port performance for weeks. Rail workers and truck drivers were also among protestors last year. South Africa’s port and rail transport services provider declared force majeure in October 2022, when nationwide strikes occurred, closing the ports of Elizabeth, Ngqura and Cape Town. Truckers in California also grouped around the Port of Long Beach last year in protest of a law that would significantly affect their work mode. The US was also at risk of a crippling strike by rail workers. However, the Biden Administration managed to avert it last minute. In the meantime, contract negotiations are still underway for US West Coast dockworkers, and labour action disruption remains a risk. Most recently in Asia, truckers took to the street in South Korea, bringing the movement of goods to a halt. The media reported heavy police presence around the Port of Busan at the time, and operations at other ports were disrupted. Industry analysts said earlier this year that inflation and strikes are two elements of concern for 2023 as they could be sources of potential supply chain bottlenecks if the financial situation remains unchanged.
Source: Bloomberg, Drewry