Supply Chain Matters provides yet another update to our previous original disruption alert regarding a labor strike that occurring in the port of Hong Kong, the third busiest ocean container port in the world. Our last update on April 12th, noted the effects at the second week of the labor disruption. This disruption is now approaching its fifth week but media reports indicate a changing but confusing picture.

First, striking crane operators have made some indications that they are willing to bend on the previous demand for up to a 23 percent wage increase.  Keep in mind that current wage rates for operators currently average $5 per hour. The Hong Kong labor department has invited union representatives to sit down with renewed talks with port contractors tomorrow.

According to a recent published Bloomberg story, the chairmen of Hutchinson Port Holdings Trust, the principal operators of the port are indicating that the port is now operating at 90 percent capacity after additional temporary workers were hired. He declares that waiting times for ships have now dropped to an average of 20-25 hours, while Bloomberg reports that at least 100 ships have skipped calling on the port.  Union representatives however take issue with statements that the labor stoppage is essentially over. Striking workers took part in a rally held at the residence of Hong Kong’s chief executive on Friday.

Transportation and shipping industry professionals are probably in the best position to actually assess what the real conditions at the port are at this point.  We continue to urge procurement and chain chain planning teams to seek the latest information and continue to plan for some transport delays for goods coming from China.  It would seem that this disruption is waning, but that remains to be seen as talks continue among both parties.  We again encourage readers to share any additional information in the Comments section associated with this commentary.

Bob Ferrari