Dockworkers at US East and Gulf Coast ports went on strike Tuesday, October 1. John Donigian, Senior Director of Supply Chain Strategy at Moody’s, identifies six critical supply chain strategies that companies should consider implementing to navigate the situation.
1. Re-route shipment and consider alternate modes of transportation
Shifting shipments from overseas points of origin or consolidators to alternative ports, such as those on the West Coast or Canada, should be the first line of defense. For high-priority items, companies should consider using air freight, which can provide a vital lifeline for time-sensitive products.
2. Reallocate existing inventory strategically
Businesses should shift stock to strategically important locations and customers to maintain service levels in high-demand areas in the event of a strike.
3. Lock in alternative capacity
Now is the time for companies to secure capacity with trucking and rail providers for alternative inland routes. Close coordination with freight forwarders and logistics providers is essential to reroute shipments effectively. Businesses must act on this quickly to avoid being caught off guard.
4. Communicate transparently with stakeholders
Companies should proactively inform customers and partners about potential delays, setting realistic expectations for delivery timelines. Clear communication and transparency will help maintain customer trust and loyalty during uncertain times.
5. Leverage regional suppliers
In addition to the above immediate actions, businesses should consider shifting sourcing to local or regional suppliers, if possible. This strategy not only reduces dependence on imports but also strengthens local supply chains, providing a buffer against disruptions caused by the strike.
6. Utilize drop shipping to maintain sales
To further mitigate impacts, companies can explore drop shipping or direct-to-customer fulfillment options. By bypassing traditional distribution channels, they can maintain sales and delivery commitments, even if their products are delayed at ports.
By implementing these supply chain strategies, companies can help safeguard their operations and enhance resilience against challenges created by the potential strike. The time to act is now.
