Consultant Insight: A world potentially on strike

It's the summer of discontent as supply chain workers seek wage concessions and improved working conditions as unions work to secure contracts, some of which have been on hold since the pandemic hit in 2020. Workers agreed to put contracts on hold during the pandemic to ensure goods flowed through supply chains. Now, rising inflation has spurred demands for higher wages and better working conditions worldwide. Workers at European ports in Antwerp, Hamburg, Emden, Bremerhaven, Bremen, Brake, Wilhelmshaven and others have staged periodic 24-hour strikes. At the same time, South Korean truck drivers ended a 10-day strike in June after reaching an agreement with their government on subsidies to ease pressure on rising fuel costs. Meanwhile, U.S. West Coast port workers continue to work, despite their July 1 contract expiration. The agreement is based on an already extended three-year contract. [caption id="attachment_69752" align="alignright" width="325"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] At the same time, U.S. rail workers have also worked without a contract since at least 2019. A cooling-off period is underway as U.S. retailers and the U.S. Chamber of Commerce urge President Joe Biden to bring labor unions and Class I railroads back to the negotiating table. Air cargo impacts Like port and rail workers, airline pilots seek agreements that have not been revised since before the pandemic. Exacerbating the situation is an ongoing pilot shortage , which was underway before 2020 , and further worsened as training school classes were canceled during the pandemic. According to the U.S. Bureau of Labor Statistics, the number of pilots and flight engineers employed has declined 2.5% from 2019 to 2021. As more and more consumers and cargo on passenger airlines take to the air, flight delays and cancellations are creeping up due mainly to staffing shortages . There were more than 820,000 delayed flights and more than 116,000 canceled flights during the first half of the year, according to flight-tracking software FlightAware. American Airlines became the latest airline to agree to pay its pilots a higher wage after a computer scheduling glitch left many flights with understaffed cockpits. This follows the United pilots’ union signing a tentative agreement in June that would raise pilots' pay by more than 14% within 18 months. However, negotiations continue with a number of other airlines, including Scandinavian airline SAS. The carrier, which canceled almost 70% of its flights today as pilots went on strike for a new contract, had filed for Chapter 11 bankruptcy protection in the U.S. earlier this week. Passenger airlines are not alone. In June, UPS and its pilots' union tentatively agreed on a two-year labor contract extension. The deal includes wage increases and pension improvements, according to the company. The agreement is subject to ratification by a majority of UPS pilots, with a three-week vote to be completed by Aug. 3. No deal for FedEx However, FedEx has yet to reach an agreement with its pilots, as the two parties continue negotiations that have been ongoing for more than 13 months. While there have been no strikes, the Air Line Pilots Association (ALPA) and FedEx pilots have ramped up their public comments: "Throughout the pandemic, the FedEx pilots helped keep the world economy afloat and commerce moving. Through their efforts, millions of vaccines and lifesaving medical equipment were transported around the world. Pilots endured working conditions unlike any ever seen in FedEx's history.” And off-duty FedEx pilots have also demonstrated across the U.S., prompting FedEx to issue the following statement on June 10: "FedEx remains engaged in productive negotiations with our pilots' union. These negotiations are a normal part of our business and have no impact on our service as we continue delivering for our customers around the world. We will continue to negotiate in good faith with our pilots and are committed to reaching an agreement that is fair to our pilots, our other team members, and all other stakeholders." Imagine if all supply chain workers that are part of a union strike at the same time — world trade would come to a stop. Supply chains should be based on fairness to all. A good reminder from Brian Laung Aoaeh, co-founder and general partner of venture capitalist firm REFASHIOND, is that “the world is a supply chain.”

Consultant Insight: A world potentially on strike

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