The global supply chain has been hit multiple times this year, with significant labour strikes disrupting key sectors critical to the movement of goods worldwide. From aerospace and shipping to logistics and transport, strikes have led to major freight delays, raised costs, and reduced capacity.

These strikes may seem isolated, but they represent a broader trend as workers across industries push back for fair compensation and job security amid the rise of automation. And for businesses dependent on timely deliveries, the consequences have been severe.

Let’s look at how these strikes are connected, their collective impact on the global supply chain, and how an unhappy workforce is reshaping the freight and shipping landscape.

Boeing strike: Airfreight capacity plunges

One of the most significant strikes in recent memory is the Boeing machinists’ strike, which began last month. The strike halted the production of key Boeing aircraft models—the 737, 767, and 777—all vital to the global air cargo industry.

The reduction in capacity is already being felt, particularly in time-sensitive sectors such as express shipping, pharmaceuticals, and electronics. At the heart of the strike are over 30,000 Boeing machinists, represented by the International Association of Machinists and Aerospace Workers.

Their demands for better wages to match rising living costs were met with a 30 percent wage increase offer from Boeing, which the union rejected. The strike led to significant production delays, also impacting Boeing’s suppliers, many of which have started furloughing workers.

As air cargo capacity tightens and demand rises, shipping costs are expected to surge, especially during peak seasons.

US dockworkers’ strike: A deal is reached but the damage is done

While the Boeing strike’s impact continues, another one led by tens of thousands of dockworkers on the East and Gulf coasts of the United States just threatened to paralyse ocean freight. The strike, which had the potential to seriously harm the US economy, was just called off after a tense three-day standoff.

Dockworkers clocked back into work on Friday after a tentative agreement was reached between the International Longshoremen’s Association and the United States Maritime Alliance, granting 62 percent wage increase over six years. Although the union had sought a 77 percent increase, the final deal still marked a significant win for the workers.

The strike’s effects, however, will take some time to clear. According to Reuters, the stoppage left 54 container ships queued outside ports, risking shortages of essential goods. JP Morgan analysts estimated that the strike cost the US economy roughly US$5 billion per day.

Shipping platform Xeneta noted that clearing the backlog could take two to three weeks, and as additional ships continue to arrive, congestion builds. Xeneta’s Chief Analyst, Peter Sand, remarked, “It’s not just about handling the ships in line but working extra hard to clear the congestion.”

Considering the strike’s resolution came sooner than investors expected, shipping stocks weakened in Asia and Europe as freight rates were no longer expected to surge.

A broader trend: Labour strikes and global supply chain disruption

Do the Boeing and dockworkers’ strikes reflect a growing trend of labour unrest in industries critical to global trade?

Workers are increasingly demanding better wages and improved working conditions as inflation erodes purchasing power. Additionally, concerns about job security amid the rise of automation are only fueling labour disputes, particularly in sectors where technology threatens to replace human labour.

This wave of strikes was also felt in Canada, where dockworkers at the Port of Montreal staged a three-day strike that brought 40 percent of the port’s container traffic to a halt. The ripple effects continue to be felt, and the action may resume if negotiations stall again.

Across industries, the core issues are the same: wages are not keeping pace with inflation, and workers are concerned about automation threatening their jobs. As these strikes become more frequent, businesses that rely on the supply chain must adapt to this new reality of labour disputes or be blindsided by them.

How strikes are impacting freight and shipping

The cumulative impact of these labour strikes has been a sharp increase in freight and shipping delays, affecting both ocean and air cargo. The businesses that operate on speedy inventory models, especially those reliant on tight supply chains, get hit the hardest by these disruptions.

Perishable goods and high-value items such as  medical supplies and electronics are at risk, as they need to move quickly through the supply chain to avoid spoilage or obsolescence. With ocean freight backlogged due to the dockworkers’ strike and air freight constrained by Boeing’s halted production, businesses face tough choices. Many are paying premiums for airfreight space, but the lack of available aircraft makes this option increasingly scarce.

For businesses that cannot absorb these higher costs have severe consequences. Shortages of essential goods could become more common, especially as the holiday season approaches. As the delays continue, the strain on global supply chains is only likely to worsen, forcing businesses to either adapt quickly or face long-term setbacks.

Long-term implications: What these strikes mean for global trade

The recent strikes at Boeing, the US ports, and the Port of Montreal are not just short-term disruptions; they are indicative of deeper issues within the global supply chain. Workers are pushing back against stagnant wages and the threat of automation, while businesses are struggling to maintain profitability in an increasingly unstable economic environment.

In the short term, we can expect continued shipping delays and rising costs as both air and ocean freight sectors grapple with capacity constraints. However, the resolution of these labour disputes may set a precedent for future negotiations across industries.

If workers secure significant wage increases or concessions on automation, it could embolden other labour groups to push for similar terms, potentially leading to more strikes in the future.

Conversely, businesses may need to reconsider their labour relations strategies. Companies that fail to address workers’ concerns about wages and job security could face ongoing labour unrest, further disrupting supply chains. Additionally, workers should keep in mind that industries may accelerate their adoption of automation technology to mitigate the risk of future strikes.

Navigating the future of supply chains

As we move further into 2024, the strikes signal that labour unrest is likely to continue. The issues driving these disputes—wage inequality, inflation, and automation—are not going away, meaning businesses must find ways to adapt to a more volatile global supply chain.

In the short term, companies should brace for continued delays and higher shipping costs. In the long term, the resolution of these strikes will likely shape labour negotiations in industries like aerospace, shipping, and logistics. However, without addressing the root causes of these disputes, labour unrest is likely to remain a persistent challenge for global supply chains.

For businesses in the air cargo and shipping industries, strategy, flexibility, and agility are the keys to weathering this period of uncertainty.