Desabastecimientos de alimentos y combustibles is a complicated tongue twister for non-Spanish speakers. But for Panamanians, Ecuadorians, Argentinians, and people in several other Latin American countries, the food and fuel shortages that the phrase describes—along with alza de precios, inflation—are causing extreme anxiety, passionate protests, and vigorous labor actions. At the same time, street blockades and trucker strikes are exacerbating those desabastecimientos in population centers such as Panama City. They are also disrupting global supply chains.
Protests in response to inflation and shortages of food and fuel are occurring on every continent. In Sri Lanka, a popular uprising chased the president from the country last week. Ghanaians are protesting runaway inflation that has seen diesel prices double. In Pakistan, the rupee has dropped to an all-time low, protesters are battling an IMF bailout that requires austerity measures, and the textile industry in Punjab closed for the first week of July due to high fuel prices. Even some of the cheerfully welcoming workers at Starbucks are pushing for unionization to protect workplace rights and improve health and safety conditions.
For supply chain managers, the labor actions of greatest concern are in transport and logistics. All at once and across the globe, truck drivers, port and maritime workers, professional staff at airlines and airports, railway workers and others are pushing for higher wages and—in the case of dockworkers—protection against job losses that they fear are coming with automation. On top of these labor actions, protesters in developing countries frequently block roads and even ports to demand action on their grievances.
A new Resilinc Special Report: Impact of Strikes on the Global Shipping Industry describes disruptive strikes and protests across Asia, Europe, and the Americas. While the fast-moving protests and labor actions are difficult to mitigate, Resilinc recommends that procurement and supply chain professionals redouble their communications with logistics providers to confirm shipments are on schedule. Of course, those companies that have already taken a deep dive into supply chains risks such as sole-source dependencies will be in a better position to adapt.
In the spotlight for U.S. retail supply chains: the delicate negotiations between West Coast dockworkers—represented by the ILWU—and the business consortium Pacific Maritime Association. Since July 1, 22,000 West Coast dockworkers have worked without a contract. In a recent joint statement, the union and PMA announced that “normal operations will continue until an agreement can be reached.” Representatives from both sides met with President Biden in June—a meeting that underscores how serious a strike at the critical ports of Long Beach and Los Angeles would be for the troubled U.S. economy.
Labor troubles are already disrupting commercial air travel, where shortages of pilots, flight attendants and ground crews are causing thousands of flight cancellations in the U.S. and Europe. Bloomberg’s trade specialist Brendan Murray warns that this “instability may ripple to the market for air cargo, which tightened considerably over the past two years because so many grounded flights cut capacity in the cargo holds” of passenger planes. “Next thing to watch,” writes Murray: “How air-freight rates fare when Europe’s temporary rules allowing goods to ride in vacant passenger cabins expire later this month.”
Supply chain professionals working for large OEMs or retailers are of course facing their own personal and professional stresses and challenges—suffering like everyone as the spending power of their salaries is eroded by inflation and summer vacations get disrupted by flight cancellations. Resilinc salutes your endurance and loyalty, and we send you muchas gracias for doing work that is critically important for your companies, communities, and country.