Labor Actions Heat Up Across Supply Chain
As the International Longshoremen’s Association (ILA) strike continues, other labor actions are also impacting various parts of the supply chain.
This week, more than 100 Amazon workers at a warehouse in San Francisco formed a union with the International Brotherhood of Teamsters. According to the Teamsters, this is the first group of Amazon warehouse employees to seek union recognition outside of the National Labor Relations Board (NLRB) election process.
“We here at DCK6 (warehouse) are incredibly proud to be joining the Teamsters and taking Amazon workers’ nationwide union effort to the next level,” said Dori Goldberg, an Amazon warehouse worker and Teamster member. “This organizing drive isn’t about one worker or one warehouse – this is a ground-up movement to ensure all Amazon workers are treated fairly and with respect. Together, we’re sending a clear message to Amazon that we will not back down. We will continue to fight for what we deserve.”
The San Francisco Amazon employees, many of whom are part-time, contend that they are aligning with Teamsters as they seek wage increases, safe working conditions and “a voice on the job.” This is the latest example of this kind of alignment, as other Amazon workers have recently united with other Teamsters in the logistics sector; in mid-September, for example, hundreds of Amazon drivers out of Queens, N.Y., joined the Teamsters and demanded that the company recognize their union and come to the table on a contract.
Elsewhere, on the manufacturing side, members of Teamsters Local 238 who work at a Cargill corn milling facility in Cedar Rapids, Iowa are on strike, following failed negotiations with that company.
“Cargill is offering Local 238 members wages that are so low it’s creating recruitment and retention issues,” declared Scott Punteney, Local 238 business agent. “Cargill can end this strike immediately by stepping up, respecting its workers, and giving them the dignity and fair compensation they’ve earned.”
In a statement shared with local media, Cargill responded that it had proposed competitive and fair package to the workers and that “we are disappointed that we could not come to an agreement with the union at this time.”
Meanwhile, the Longshoremen’s work stoppage is affecting port operations around the country and is expected to affect the supply chain that serves the grocery business. Bananas may be the pandemic-era toilet paper example.
“About 75% of imports enter the USA through the East or Gulf Coast, which makes sense because of geography and wanting to get a cheap product as close as possible to the end consumer using water transportation, which is much cheaper than refrigerated truck on a per-mile basis,” said Jason Miller, a professor of supply chain management at the Eli Broad Collage of Business at Michigan State University, in a recent LinkedIn post. “There is zero chance of shifting all these imports through the West Coast, and the low dollar value per unit of weight for bananas means putting them on planes isn’t economical. Moreover, you can’t frontload a perishable product.”
Although there have been some news reports of long lines at Costco stores, that club operator has been preparing for such an action. “The port strike is something we've been watching very closely for some time,” said President and CEO Ron Vachris in the company’s earnings call in late September. “We knew about the timing of this as well. When you think about the impact to our business, we import primarily nonfoods and some limited food and sundries come in, but nonfoods is less than – about 25% of our total business and only a subset of that is imported. There's some domestic goods in there as well that are not imported in nonfood.” He added that the company had contingency plans in place to get holiday goods ahead of time and that its buyers “are all over it.”
Texas-based retailer H-E-B also sought to assure customers that it has a handle on its supplies. “At H-E-B, we regularly prepare for potential supply chain situations. We do not anticipate any customer impact from the port strike at this time. Our team has been working with suppliers for weeks to serve Texans. Most products are not impacted by this strike. Our stores are receiving shipments and are in a strong position that allows our Partners to continue to restock shelves throughout the day,” the company said in a statement posted on the social platform X.
The federal government, for its part, continues to monitor the situation and is encouraging the ILA and the United States Maritime Alliance (USMX) to get back to talks. “Over the last week and more, I have spent hours on the phone and in meetings with the parties urging them to find a way to reach a fair contract. This country’s port workers put their health and safety on the line to keep working through the pandemic so we could get the goods we needed as COVID raged and these workers will help communities recover from the devastating effects of Hurricane Helene,” said Julie Su, Acting Secretary of Labor. “As these companies make billions and their CEOs bring in millions of dollars in compensation per year, they have refused to put an offer on the table that reflects workers’ sacrifice and contributions to their employer’s profits."
MSU’s Miller posted on LinkedIn this week that the pressure is on to resolve the situation. “My personal opinion is that the Biden Administration's resistance to using Taft-Hartley will start to decline once we start to see some domestic manufacturing plants put workers on temporary layoff because they can't get imported components, or they see declining demand due to closure of exports or knock-on effects from their customers slowing production,” he noted.
