Effects of Strikes on Industry

I’ve received many requests regarding the magnitude of disruption if there is a UAW strike against Ford, GM, and Stellantis that could start once the current labor contract expires at 11:59 PM on 9/14. Below is my attempt to answer this in two charts. Thoughts: •Top chart shows industrial production of motor vehicles and parts in the event of a hypothetical strike. To calculate this, I’ve assumed August 2023’s seasonally adjusted industrial production was the average of April – July. I then extrapolated the impacts for September and October based on the fact this strike could be ~3x as large as the September – October 2019 GM strike (https://lnkd.in/gyT5PYRn; https://lnkd.in/geUfa4hm). •As can be seen, September 2019 saw a ~5% decline in output from that August, which doubled in October to ~11%. As such, I’ve estimated that a strike on all three automakers that starts this month results in a 15% drop and, if it lasts all through October, places October’s output at 30% below the guesstimate for August. The estimate for September places output about where it was at in the worst of the 2021 parts shortages, whereas the hypothetical October value is on par with March 2020, when automakers shut down towards the end of the month in response to COVID-19. •In terms of the cascading impacts, the bottom plot shows the domestic requirements for each $1 of motor vehicle and parts output to each industry from the Bureau of Economic Analysis (https://lnkd.in/eQdPji9). This chart indicates each $1 in lost motor vehicle and parts outputs will cause a $0.11 decrease in domestic primary metal manufacturing (e.g., steel, aluminum, foundries), $0.08 decrease in domestic fabricate metal output, $0.04 decrease in plastics and rubber products, $0.03 decrease in truck transportation, $0.03 decrease in chemicals excluding pharmaceuticals, etc. In total, each $1 of lost output will cause a $2.12 decrease due to the cascading effects across all industries This is a very large cascading effect (within manufacturing, only food, beverage, and tobacco manufacturing has a larger domestic multiplier at $2.29). Implication: if we see a prolonged strike by the UAW at the domestic US Big 3 automakers, we will undoubtedly see a deepening of the current freight recession. I’m hoping all sides can come to an amicable arrangement before a strike would happen. #supplychain #supplychainmanagement #shipsandshipping #manufacturing #freight #trucking    

Major U.S. port labor strikes imminent on 1𝘴𝘵 𝘖𝘤𝘵𝘰𝘣𝘦𝘳 There’s a 𝗵𝗶𝗴𝗵 𝗰𝗵𝗮𝗻𝗰𝗲 of labor strikes at 𝟯𝟲 𝗺𝗮𝗷𝗼𝗿 𝗽𝗼𝗿𝘁𝘀 on the U.S. East and Gulf Coasts. 45,000 workers are set to strike on October 1st, 2024. I’ve seen analyses ranging from: • "The Taft-Hartley Act will call this off" •  "The U.S. will run out of everything in days" •  "Europe will be severely affected" Here’s my take: 𝗧𝗵𝗲 𝗳𝗮𝗰𝘁𝘀: • 𝟰𝟯% of U.S. container shipments flow through these ports • 5 of the 10 busiest North American ports will be affected • 𝟰𝟱,𝟬𝟬𝟬 𝘄𝗼𝗿𝗸𝗲𝗿𝘀 could strike This is big. The U.S. will likely be 𝘀𝗲𝘃𝗲𝗿𝗲𝗹𝘆 𝗶𝗺𝗽𝗮𝗰𝘁𝗲𝗱. 𝗚𝗹𝗼𝗯𝗮𝗹 𝗿𝗶𝗽𝗽𝗹𝗲 𝗲𝗳𝗳𝗲𝗰𝘁𝘀: I expect the impact on 𝗘𝘂𝗿𝗼𝗽𝗲 and 𝗟𝗮𝘁𝗶𝗻 𝗔𝗺𝗲𝗿𝗶𝗰𝗮 to be significant—and felt quickly. These regions depend on the affected ports. The 𝗔𝗣𝗔𝗖 𝗿𝗲𝗴𝗶𝗼𝗻 can shift to West Coast ports more easily, but Europe? Not so much. 𝗜𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝗘𝘂𝗿𝗼𝗽𝗲: • 𝗔𝘂𝘁𝗼𝗺𝗼𝘁𝗶𝘃𝗲 𝘀𝗲𝗰𝘁𝗼𝗿: German automakers rely heavily on East Coast ports • 𝗣𝗵𝗮𝗿𝗺𝗮𝗰𝗲𝘂𝘁𝗶𝗰𝗮𝗹𝘀: 69% of U.S. containerized pharma products pass through these ports • 𝗟𝗡𝗚 & 𝗢𝗶𝗹: Disruptions could worsen European shortages How will this affect Europe’s 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝘀𝘁𝗮𝗹𝗹𝗲𝗱 𝗲𝗰𝗼𝗻𝗼𝗺y? 𝗕𝗮𝗰𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗨.𝗦.: • Produce could be hit first • 90% of U.S. containerized 𝗽𝗵𝗮𝗿𝗺𝗮 imports flow through East Coast ports • The U.S., while a 𝗻𝗲𝘁 𝗼𝗶𝗹 𝗲𝘅𝗽𝗼𝗿𝘁𝗲𝗿, still relies on imports and could be hit Almost the whole U.S. economy will be affected. Usually, I analyze ripple effects. This time, they’re obvious—there are 𝘁𝗼𝗼 𝗺𝗮𝗻𝘆. It’s not like 𝗱𝗼𝗺𝗶𝗻𝗼𝘀 falling. It’s a 𝗺𝗲𝘁𝗲𝗼𝗿 hitting the whole board. 𝗕𝗮𝗰𝗸𝗹𝗼𝗴 𝗘𝘀𝘁𝗶𝗺𝗮𝘁𝗲𝘀: • 1 day of disruption = 𝟰-𝟲 𝗱𝗮𝘆𝘀 of backlog • 3 days = 𝟮𝟭-𝟮𝟱 𝗱𝗮𝘆𝘀 •  7 days = 𝗺𝗶𝗱-𝘁𝗼-𝗹𝗮𝘁𝗲 𝗡𝗼𝘃𝗲𝗺𝗯𝗲𝗿 •  +14 days? Highly unpredictable. The longer the disruption lasts, the 𝗺𝗼𝗿𝗲 𝗰𝗵𝗮𝗼𝘁𝗶𝗰 it becomes. It's because of second order effects. This could be a "text-book" Fat-Tailed distribution case. 𝗦𝘁𝗿𝗶𝗸𝗲 𝗟𝗶𝗸𝗲𝗹𝗶𝗵𝗼𝗼𝗱: With the strike possibly starting 𝘁𝗼𝗺𝗼𝗿𝗿𝗼𝘄, the odds are 𝗵𝗶𝗴𝗵. The 𝗨𝗻𝗶𝗼𝗻'𝘀 demands are major: • 77% wage hike over several years • Automation protection • Better healthcare and pensions The demand for 𝗮𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗼𝗻 𝗽𝗿𝗼𝘁𝗲𝗰𝘁𝗶𝗼𝗻 stands out. This could be the last chance to "halt" automation. (That seems out of touch with reality) If they don’t secure it now, the next opportunity is in 6 years—far too late. If you think they aren’t serious, check out the ILA video below. (Source: YouTube Int. Longshoremen's Assoc.) I believe they mean business. Will President Biden 𝗶𝗻𝘁𝗲𝗿𝘃𝗲𝗻𝗲 under the Taft-Hartley Act? Given the upcoming election, it’s possible. But maybe not right from the start.

One Year Later... A year after the historic double strikes, Hollywood continues to grapple with the aftermath. Was it a necessary revolution or an industry killer? The numbers paint a stark picture: L.A. entertainment worker employment dropped 17% during the strikes. Now, U.S. production is down 37% compared to 2022. Writers and actors are struggling to meet union health insurance thresholds. But the ripple effects extend far beyond union members. Agents, managers, lawyers, below-the-line crew, vendors, and studio/network/production company staff - those who keep the industry's gears turning - are facing their own crisis. With productions halted and deals frozen, many found themselves on the chopping block and in unexpected limbo. Unscripted workers often overlooked in these discussions saw their livelihoods threatened as networks scrambled to fill content gaps. Wasn't reality TV supposed to be the safety net during the post-strike crunch? Instead, a 57% drop in reality TV shoots is the biggest factor behind the industry-wide drop in production, according to the latest FilmLA report. But the gains for union members are significant: AI protections, increased wages for background actors, and restructured writers' rooms. Some creatives hail these as vital safeguards for our future. Others aren't so sure. Many feel the strikes accelerated an inevitable industry contraction. The AI provisions are particularly contentious. While groundbreaking, their effectiveness remains to be seen as technology rapidly evolves. Recent incidents highlight ongoing confusion about digital replicas and consent. So, industry professionals, how has your work life changed since the strikes? Was the sacrifice worth it? And for those not involved in negotiations, how do you view the outcome? #hollywoodstrikes #entertainmentindustry #ai

WGA strike resolution: soaring triumph or pyrrhic victory? Many have described the resolution of the writers’ strike as a big win for the WGA (Writers Guild of America), with headline positives around increased wage levels, minimum staffing levels (room sizes), success-based residuals for streaming and limits on the use of AI in the writing process. Sounds positive, and I understand the desire to celebrate after five months on strike – anything other than branding the outcome a great success risks doubt creeping in about whether it was worth it, and you don’t want that. But as the days pass, is some of the initial gloss wearing off? After all, the wage increases are less than the prevailing rate of inflation and the minimum room sizes are largely confirming current practice. Sounds positive compared to the opening studios position, but is that the right comparator? And residuals for streaming projects are welcome if they are paid, but the catch is they also increase the incentive to drop a show early if it is not a mega-hit. The bigger issue is that the wider problem remains, that of the shrinking total revenue pool for funding shows, because streaming is harder than some had hoped, and because the linear cable bundle is falling apart. Against this backdrop, improved wage rates and guaranteed room sizes leaves only one way to square the financial circle: the industry will make fewer shows. The alternative solution – pursued in many other industries – of improving productivity through new technologies like AI, is not wanted here. It’s a curious outcome. In most industries, the union is focused on the employment opportunity for its members. Terms and conditions are important, but the priority is often the aggregate scale of the labour opportunity – jobs retained for as many as possible. But not here. The volume guarantees (room sizes) relate to labour input per project, but say nothing about the total volume of projects or the aggregate labour opportunity. And if total revenue is under pressure and the labour cost of each project is maintained or increased, there will be fewer projects. So while the strike has made it more credible for some writers to have a proper writing career – as opposed to a precarious gig existence – there will be fewer such people going forward. And not just writers, but also actors and others in the creative process. Perhaps this was always going to happen. The recent boom in content production was unsustainable and already starting to ebb when the strike came. But the studios have used the strike as a useful reset moment, without need for collusion. Deals were suspended, scaled back or cancelled. And now the “wins” from the strike have locked in this new normal of reduced volume. Perhaps this is a win, for some at least. For the writers who stay employed, the employment experience will be better. But many others will find that opportunities have dried up and they might need to start looking for a different career.

The threat of a dock strike at U.S. East Coast and Gulf ports comes at a crucial time for retailers preparing for the holiday season. The potential for delays, inventory shortages, and increased costs could turn what should be the most profitable time of year into a logistical nightmare. With the strike set to begin Tuesday, many retailers have found it too late to build up stock ahead of disruption. This makes it essential to consider the alternative strategies now being weighed. One of the major concerns is inventory shortages. If products can’t reach U.S. shores on time, particularly high-demand items like toys, electronics, and apparel, retailers may face empty shelves during peak weeks. Stockouts lead to lost sales and risk driving customers to competitors. For many, inventory arriving late for the holidays loses value, leading to steep markdowns or waste. When considering dock alternatives, there are three options, all with risks and costs: West Coast ports may seem like a logical alternative, but they are prone to congestion and labor disruptions, especially during peak seasons. Rerouting here may overwhelm infrastructure, creating new bottlenecks and delays. Added logistical costs are a certainty. Canadian and Mexican ports introduce customs as a potential source of delay. Shipments must clear U.S. Customs and Border Protection (CBP), creating holdups due to inspections or paperwork issues. There is also uncertainty around whether these foreign ports can handle the surge in demand without facing the same capacity issues. Overland transportation from these ports into the U.S. also drives up costs and risks further delays. Air freight offers a quicker but costly solution. Retailers must choose whether to absorb the expense, impacting margins, or pass the cost to consumers, which may not be well received by price-sensitive shoppers. Customer frustration is also a significant concern. Consumers expect fast, reliable shipping, especially during the holidays. Any delay could lead to lost loyalty, negative reviews, and a tarnished brand image. Even minor disruptions may push customers toward competitors. These are some of the considerations. Domestic product is another consideration. Retailers are working with suppliers to secure priority shipments or reroute goods through unaffected networks. Additionally, enhancing e-commerce fulfillment and emphasizing BOPIS can help mitigate disruption by eliminating the need for overland shipping. Since customers pick up products directly from local stores, BOPIS avoids potential delays caused by the strike. Retailers are also being transparent with their customers. Clear communication regarding potential delays, paired with early holiday promotions, helps manage expectations and reduce frustrations. Encouraging early shopping spreads demand over time, reducing pressure as the strike unfolds. As the 11th hour approaches, I would love to hear how brands are positioning themselves. Thoughts?

We have about 25 days left before the East Coast and Gulf Coast Port labor agreement between the ILA and USMX expires on 9/30/24. ILA president Harold Daggett has made it clear in a recent video about what the ILA’s intentions are, “The ILA most definitely will hit the streets on October 1 if we don’t get the kind of contract we deserve…Mark my words, we’ll shut them down…We’re at an impasse…we are very, very far apart.” USMX acknowledged in a press release today 9/5/24 that they “hope the ILA will reopen dialogue and share its current contract demands so we can work together on a new deal…” With 25 days left before the labor agreement expires it’s a bit scary to think that both sides still aren’t talking since 6/11/24. The ILA just concluded a two-day meeting today 9/5/24 where union members voiced unanimous support for a strike on 10/1/24 if a new contract meeting its demands isn’t in place. Why does the ILA want to strike? 🚢 Oppose increased port automation. o  Where would we be without automation? Increased automation could potentially increase productivity, safety, and reduce wait times at the ports among other benefits. It also would ironically reduce the ability for unions to strike and slow the US economy. 💲 Want higher wages. Insiders believe that the ILA is targeting an increase larger than the 32% increase that the West Coast Ports got in 2023 along with a more “generous bonus package.” o  Currently longshoremen can make between $150,000 to $250,000 annually. Much less than the expected annual compensation for a starting quarterback in a Power Four football conference which is about $820,000. 😊 What are the economic implications of a strike? 💸 Per US Analysts at Sea-Intelligence: o  In October 2024, it is estimated that East Coast ports would handle 2.3M TEUs normally or about 74,000 shipping containers per day. o  The value of this daily freight is $3.7B ($50,000 per container). o  A one-day ILA strike would take five days to clear. o  A one-week strike would cause slowdowns until mid-November. 💸 Per MITRE: o  A 30-day strike at The Port Authority of New York & New Jersey could result in an economic impact at $641M per day. o  A 30-day strike at The Port of Virginia at $600M per day. How will this affect the West Coast ports? 🚢 “…only about 5-10% of our export customers have made this move [to shift from East to West Coast ports}, but we expect this to grow as we near the potential strike date…” –Mia Ginter, director of North America Ocean at C.H. Robinson. 🚢 According to Xeneta, the East Coast share of total container imports into the U.S. from Asia decreased from 34.4% in Q4 2023 to 32.6% in Q2 2024. The West Coast ports’ share increased from 57.7% in Q4 2023 to 60% in Q2 2024. As this ILA rhetoric gets more heated and continues to force increased West Coast port activity we will continue to track how this translates to tenant demand for warehouse space through the end of the year and into 2025.

Work stoppages ended the last golden era of trading cards. As the WNBA and MLB face potential strikes and lockouts, it’s worth remembering how devastating these disruptions can be for the industry. In the mid-1990s, two seismic events shook our industry: the 1994 MLB strike and the NHL lockout that wiped out half the ’94-95 season. Games vanished, but so did something even more valuable—fan enthusiasm. Collectors don’t see cards as cardboard; they see them as part of the stories that fuel their fandom. When those stories stopped being written, the emotional connection to collecting fractured. The effects were brutal. Baseball fans soured on the sport. Other leagues didn’t see a lift. In fact, they struggled, too. The speculation bubble of the junk-wax era popped harder and faster, and the card market consolidated. Millions of fans walked away from the hobby, many for good. That’s the cautionary tale we can’t forget. The next work stoppage will test the bonds between sports, stories, and collecting. If we want to protect the hobby, we need to think now about how to keep fans connected if the games themselves go dark.

🧑⚖️ “How many industrial units have closed in this country because of trade unions? They are largely responsible for stalling industrial growth.” - Justice Vikram Nath Suryakant, Supreme Court of India This sharp observation from Justice Suryakant a judge renowned for his straightforward stance on governance, economic reforms, and curbing inefficiencies came during a January 2025 Supreme Court hearing on labour disputes. He spotlighted how rigid union tactics, including frequent strikes, opposition to automation and technology adoption, and inflexible hiring/firing rules, have triggered factory shutdowns, massive job losses, and a drag on India's manufacturing ambitions under initiatives like Make in India. Official data from the Annual Survey of Industries (ASI) reveals over 1,200 industrial units shuttered between 2015-2022 alone, with labour unrest listed as a primary factor in hundreds of cases. This mirrors grim historical precedents: the 1980s textile mill crisis in Mumbai (e.g., 55 mills collapsed, displacing 2.5 lakh workers) and Kolkata (over 40 mills gone), where endless strikes and "militant unionism" turned thriving hubs into ghost towns. More recently, the 2020-2023 period saw 300+ units close amid COVID recovery, per ASI and Labour Ministry reports, exacerbating unemployment in labour-intensive sectors. These patterns highlight the need for balanced reforms. Major Industries Hit Hardest Textiles & Apparel: 1980s Mumbai-Kolkata collapse; ongoing strikes in Tamil Nadu mills (e.g., 150+ closures since 2015). Steel & Metals: Jamshedpur and Bhilai disputes; 200+ units down 2015-2022 due to wage standoffs. Automobiles: Gurugram-Maruti plants hit by 2011-2022 strikes; automation resistance led to 100+ SME shutdowns. Chemicals & Fertilizers: Kanpur and Gujarat hubs; 80+ closures from prolonged lockouts. Engineering & Machinery: Pune and Coimbatore; labour rigidity blamed for 250+ factory exits. Power & Cement: Strikes in Rajasthan and MP; contributed to 150+ unit failures amid rising input costs. 1982 Mumbai Textile Strike: 250,000+ workers; 50-58 mills permanently shut, 150,000+ jobless. 1980s Kolkata Textiles: 40+ mills collapsed amid strikes. 1974 Ahmedabad Textiles: Mass layoffs, multiple mill closures. 1980s North India Sugar: Prolonged disputes led to factory shutdowns. Recent Examples (2020s) Posco Steel (Maharashtra, 2021): Protests halted ops, threatened 80% auto production. 2020 General Strike: Shut steel, coal, power, ports, oil across India. Meghalaya Cement (2025): Trucker strike stopped clinker dispatch. 2022-23 COVID Closures: 300+ units, labour cited. #LabourReforms #ViksitBharat #LabourMinistry #NITIAayog #LabourReforms #MakeInIndia #EconomicGrowth #Industry

There is no resolution in sight: negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) have stalled, making a strike by 45,000 dockworkers look inevitable. The strike, which is set to commence at midnight, poses a critical threat to U.S. supply chains, with widespread port closures expected across the East and Gulf coasts. What’s at Stake: This disruption could grind operations to a halt at 36 key ports—responsible for handling nearly 50% of all U.S. trade. The ripple effect on businesses could be significant, leading to: Severe supply chain delays and halted operations at crucial container ports. Extended transit times and the need for costly rerouting. Higher shipping rates and additional fees due to cargo congestion and storage. Surcharges from carriers already announced, including declarations of Force Majeure by some. Global shipping slowdowns as bottlenecks intensify. Key Impacts for Your Business: Port Closures: Expect major disruptions at East and Gulf Coast entry points. Shipping Delays: Prolonged transit times could lead to increased costs for businesses and consumers. Costly Storage Fees: Stranded cargo may result in significant detention and demurrage charges. Industry-Wide Ripples: Retailers and importers will feel the effects, especially during peak season. Global Congestion: Heightened demand for alternative routes and services will drive freight rates higher. Proactive Recommendations to Minimize Disruption: Prepare for West Coast Congestion: As cargo reroutes to the West Coast, anticipate delays and increased fees due to congestion. Expect Docking Delays: Cargo destined for East and Gulf Coast ports will experience prolonged wait times, even post-strike. Consider Air Freight: For urgent shipments, air freight remains the quickest option. JAS offers a variety of air cargo solutions, though high demand will likely push rates up. Plan for Increased Costs: Rising demand and delays will lead to higher shipping rates, along with elevated storage, detention, and demurrage fees. Review Incoterms: Ensure that all parties are clear on financial responsibilities for additional costs caused by delays or rerouting. JAS is Here to Support You: To help navigate these challenges, JAS has developed contingency plans. We recommend exploring alternative solutions like air freight for time-sensitive shipments or strategic rerouting to minimize delays. Our team is ready to tailor logistics strategies to keep your supply chain moving. Contact your JAS representative today to discuss how we can support your business during this critical time.