Navigating Labor Uncertainty : Optimizing Supply Chain Resiliency

In the post-COVID landscape, the U.S. labor market is experiencing a surge in labor negotiations and union victories, reshaping industries such as healthcare, manufacturing, and logistics. Notable labor achievements in 2023and 2024 have bolstered wages and benefits for workers in major organizations like UPS, the “Big Three” automakers, and west coast dock workers, signaling a strong trend toward empowered labor negotiations. Despite recent contract resolutions, supply chains remain vulnerable to potential disruptions, especially as demand for fair wages and benefits persists. For the automotive industry, in particular, even short-term labor actions could have profound impacts due to its reliance on imported parts and east-coast ports, with potential aftersales losses reaching nearly $340 million per day.

To mitigate these uncertainties, Ducker Carlisle recommends a resilient approach to supply chain management, emphasizing investment in workforce retention and skill-building, optimizing network design through near shoring, and leveraging best-in-class technology. By integrating flexible inventory strategies and automation, organizations can bolster their ability to respond to labor shifts, reduce disruptions, and secure long-term profitability. In the face of ongoing labor challenges, these steps provide a robust framework for navigating the evolving macro environment.