The Port Strike: What It Means for Supply Chains and Healthcare

As of October 1, 2024, the tension surrounding the strike by the International Longshoremen’s Association (ILA) has reached a critical point. Representing approximately 45,000 port workers who handle about 50% of the nation’s cargo shipments, the ILA has initiated a strike due to unresolved negotiations with the United States Maritime Alliance (USMX). This action threatens to disrupt various sectors, particularly healthcare, which relies heavily on timely imports of essential goods.

The Stakes of the Strike

The current strike has brought major ports along the East and Gulf Coasts to a halt. For industries dependent on international imports, the consequences could be severe, should the situation persist. Healthcare providers may face challenges in acquiring critical medical supplies, equipment, and pharmaceuticals. Disruptions can impact patient care, complicate surgical schedules, and strain an already fragile healthcare supply chain.

Each day of port inactivity could lead to a backlog taking up to a week or more to resolve, potentially leaving healthcare facilities short on essential supplies just when they are needed most. The ripple effects of this disruption extend beyond healthcare, affecting numerous sectors reliant on timely deliveries.

Preparing for Uncertainty

In light of the ongoing strike, proactive preparation is essential. Here are several strategies that ECRI members and other organizations can employ to mitigate potential disruptions:

1. Identifying Safe Substitutes

To avoid delays in care, healthcare organizations need to determine comparable alternatives that won’t put patients at risk. Elements to consider when diversifying supply include:

• Key Performance Indicators: Recognizing key metrics to benchmark against can help you quickly build a list of safe, vetted alternatives and provide transparency with respect to how and why the alternatives were selected.
• Outsourcing Expertise: Choose the best product substitutes to address shortages, while meeting your organization’s unique needs and adhering to high performance, quality, and safety standards by engaging with an external party that provides visibility to all alternatives available in the market, not just the alternatives that align with your GPO contracts.

2. Increasing On-Hand Inventory

Many organizations are increasing their on-hand inventory levels to approximately six weeks’ worth of supplies. This strategy involves several considerations:

• Burn Down Rate: Understanding how quickly supplies are consumed helps organizations determine the optimal amount to stockpile without overcommitting resources.
• Financial Cost: Bulk purchasing can strain budgets, necessitating a careful evaluation of the financial implications against the risk of supply shortages.

3. Supplier Strategies and Rerouting

With the threat of the strike, some suppliers are attempting to reroute shipments to the West Coast. However, this is often more complicated than anticipated due to:

• Capacity Issues: The West Coast ports may struggle to handle sudden increases in cargo volume, leading to further delays.
• Cost Implications: Rerouting shipments may incur additional transportation costs, complicating overall supply chain expenses.

4. Exploring Airfreight Options

Airfreight presents a potential alternative for urgent shipments, though it comes with considerable costs and scalability challenges. While airfreight can expedite deliveries, organizations must consider:

• Cost-Effectiveness: The high expense of airfreight may not be feasible for large volumes or long-term solutions.
• Logistical Complexity: Coordinating airfreight requires advanced planning and partnerships with carriers.

5. Sympathy Strike Concerns

The risk of a sympathy strike, where workers in other sectors join in solidarity, adds another layer of complexity. Such strikes could exacerbate disruptions across the supply chain, making it essential for organizations to prepare for a broader impact.

6. Conservation Strategies and Utilization Reviews

Organizations are implementing conservation strategies and conducting utilization reviews to maximize existing resources. These strategies may include:

• Clinical Practice Review: Assessing and optimizing clinical practices can help reduce waste and ensure the best use of available supplies.
• Physician Involvement: Engaging physicians in discussions about alternative products can ensure that effective options are considered amid shortages.

7. Awaiting Confirmation from Distributors

Organizations are also waiting for confirmation from distributors regarding their plans to build inventory. Clear communication and transparency from distributors are crucial in preparing for potential shortages.

8. Impact on Custom Packs

The strike poses potential risks to custom packs, which include critical components and sterilization processes. Delays in receiving these supplies could severely impact patient care and operational efficiency.

9. Conducting Risk Analyses

Many organizations are proactively conducting risk analyses by drafting heat maps of their high-volume suppliers serviced from the East and Gulf Coasts. This approach allows them to:

• Identify Vulnerabilities: Recognizing which suppliers are most at risk helps organizations prioritize their response strategies.
• Develop Contingency Plans: A clearer understanding of the supply chain landscape enables organizations to create targeted plans to mitigate risks.

Current Supply Challenges

Specific medical supplies have emerged as critical points of concern amid the strike. Notably, items like BD BACTEC, BD Cloraprep, BD needles, syringes, spinal needles, and blood serum tubes are currently at risk of disruption. While air transportation may mitigate some of these issues, it does not eliminate all challenges.

In the past, healthcare organizations have faced difficulties with other essential items such as syringes, Foley catheter trays, and RSV test kits. Fortunately, these particular items are not posing challenges at this time, but the fluidity of the situation necessitates continuous monitoring.

As healthcare providers assess their inventory and supply chains, it is crucial to remain aware of these potential vulnerabilities and have contingency plans in place to address any emerging issues.

The Bigger Picture: Supply Chain Resilience

The ongoing port strike serves as a stark reminder of the fragility of our supply chains. The COVID-19 pandemic previously exposed many vulnerabilities, and as we confront this new challenge, it’s essential to prioritize resilience in our supply systems.

Investing in diversified sourcing, enhancing inventory management, and fostering strong relationships with suppliers are critical steps organizations can take to fortify their supply chains against future disruptions.

Conclusion

The strike by the ILA creates significant uncertainty for many industries, particularly healthcare. While the situation unfolds, proactive measures taken by ECRI members and other organizations will be vital in navigating the ongoing disruptions.

By increasing on-hand inventory, engaging with suppliers, and employing conservation strategies, organizations can better prepare for the challenges ahead. In this rapidly changing environment, adaptability and foresight will be key to maintaining continuity in healthcare supply chains and ensuring essential services remain uninterrupted.

As we continue to monitor this situation, let’s stay informed and prepared, ready to act swiftly in response to the challenges that arise. The resilience of our supply chains depends not only on our current actions but also on our collective ability to adapt and respond to future challenges.

Access crucial expertise and resources in developing strategies to navigate the disruptions caused by the ongoing strike, and to assure you are making informed decisions during this challenging period.