Reasons not to panic about looming port strikes
|Summary
Prolonged port strikes would eventually be problematic for supply chains, but fattened inventories and a compelling case for presidential intervention suggest to us that worries of imminent disruption are overblown.
Port whine: Don't drink-in your sorrows
While work stoppages related to a looming dockworker strike along U.S. East and Gulf Coast ports cannot be ruled out, our sense is that doomsday scenarios pointing to major supply chain disruption are overstated for two reasons.
The first is that controlled chaos has been the norm in the global shipping business throughout this expansion, and smart purchasing managers have adjusted their approach by bringing on critical inputs months in advance. The second is that the Taft-Hartley Act allows the President to mandate workers to return to their posts for an 80-day period while negotiations continue. It is hard to imagine an outgoing President Biden not invoking this mandate to ensure stability in the weeks leading up to the U.S. Presidential election.
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