According to a report, UPS is responsible for moving roughly one-fourth of all packages shipped each day in the US. In the event of a strike, this would leave a significant hole in the supply chain, prompting businesses nationwide to search for alternative solutions. The New York Times states that many companies are turning to FedEx or the Postal Service as backup options. Some businesses have learned from past disruptions, such as the pandemic, and have diversified their supply chains. However, smaller businesses are feeling the strain and lack the time to deal with alternative carriers.
In recent years, various events including tariff battles and the Suez Canal incident have highlighted the importance of backup systems. Nordstrom’s chief supply chain officer explains that they have focused on moving freight between carriers as needed, offering more flexibility and speed compared to previous years. The dependence on FedEx as a backup option may come with increased delivery costs. For example, the Harlem Candle Company would have to pay an additional $2 per candle for shipments in the New York area. This has led to an increase in demand for third-party carriers, some of which have the negotiating power to secure better prices with FedEx and the Postal Service.
While there is still hope that a strike can be avoided, or that it might not last long, the possibility of even a brief strike is concerning. As shipments quickly accumulate on loading docks, the resulting backups could have lasting effects. A few days of strike action could cause significant delays and disruptions to the supply chain, as noted by a supply chain consultant interviewed by CNN.
In conclusion, businesses are preparing for the potential impact of a UPS strike by exploring alternative carriers and developing backup systems. However, the reliance on FedEx and other options may come with increased costs and logistical challenges. The possibility of a strike, even if short-lived, poses risks to the supply chain and highlights the need for contingency plans.
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