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Supply chain normalization post dockworkers strike duration is uncertain

Dockworkers' union has decided to suspend their strike at East and Gulf Coast ports until mid-January, following a tentative deal reached with the U.S. Maritime Alliance. The strike, which lasted for roughly three days, impacted approximately 36 seaports staffed by International Longshoremen's Association (ILA) dockworkers.

The deal, which still needs to be ratified by both parties before January 15, would see dockworkers' pay increase by 62% over the new contract. However, negotiations are ongoing regarding issues related to automation within the ports.

The impact of the strike on the supply chain is significant, with a backlog of cargoes that will take several weeks to clear. According to Douglas Kent, EVP of corporate and strategic alliances at the Association for Supply Chain Management, the recovery process is estimated to take a 1-to-5 factor ratio, meaning for every one day of shutdown, it will take five days of recovery.

The delays in offloading inbound cargo have created a ripple effect throughout the supply chain, affecting various players involved in the shipping, storing, and transportation of goods. The knock-on effect of disrupted activity at ports has made it challenging for goods to be in the right place at the right time, impacting the overall efficiency of the supply chain.

As East and Gulf Coast ports begin to reopen and resume operations, efforts will be focused on catching up with handling shipments and clearing the backlog caused by the strike. Some shippers that diverted to other ports outside the U.S. during the strike will also face the challenge of recovering their containers and dealing with the aftermath of the disruption.

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