US Port Workers on Strike – Potential Disruption to Hospital Supply Chain

This Market Alert is to make you are aware of the strike by dockworkers and members of the International Longshoremen’s Association (ILA) that began today, Tuesday October 1. The existing labor contract expired at midnight yesterday. Talks between the U.S. Maritime Alliance (Represents the ports and the largest longshoremen union in North America including more than 50,000 port workers.) had reportedly been progressing but reached an impasse yesterday.  This strike has halted cargo traffic in 14 major US ports on the East and Gulf Coasts of the US. For US hospitals, it is recommended that they plan for possible supply chain disruption, and a slowing flow of critical products shipped into US ports. Here are some additional details:

• The strike began at 12:01 a.m. ET when negotiators for the ILA and the United States Maritime Alliance (USMX) failed to reach an agreement.
• The major issues leading to the impasse include wage increases and the use of automation; a 50% wage hike over 6 years has been offered by the USMX but rejected by the ILA.
• The strike is expected to have a large impact on the US economy as shipments of many products compete with inbound holiday shipments heading for retail shelves. Wall Street forecasts indicate the strike could cost as much as $4.5 billion per day to the US economy.
• Port disruptions are limited to the Eastern US from Maine to Texas, but are forecast to cause traffic jams in West coast ports due to the expected to surge in volume.
• The expected duration of the strike is uncertain; the ILA has made public commentary that it will strike for as long as it takes to accomplish its goals for the new labor agreement.

For hospitals, the following steps may help mitigate the adverse impact of the strike:

1. Confirm the status of critical orders with suppliers and distributors of goods produced outside of the US
2. Notify departments of potential disruption to a range of products
3. Enact product conservation measures that by now should be familiar to hospitals operating in a post-pandemic environment

Miga will continue to monitor this situation