VR World

The West Coast Port Strike is Wreaking Havoc on the PC Industry

The supply chain for the PC components industry may come to a grinding halt if labor relations between port managers for the United States’ west coast ports and the port workers’ union does not improve soon.

Labor negotiations between Pacific Maritime Association, which handles labor negotiations for port managers on the west coast of the US, and the International Longshore and Warehouse Union, which workers at these ports belong to, have been tense for the past few months. Workers officially went on strike in November, but ports remained operational albeit at a slower rate. Recently the union announced that it would stop work at the ports — including the country’s busiest at Los Angeles and Long Beach — from Thursday to Monday to protest what it calls underhanded tactics by the PMA.

Caught in the middle of this is the PC industry, as components bound for the US from Taiwan and China have to pass through these ports that are now backed up. One industry insider in Taipei VR World spoke to said that the slowdown has caused big delays and a logistical nightmare for the PC industry in the US.

The supply chain for the PC components industry is intricately managed, and there’s not much leeway for delays. With all the products sitting in idle ports or on ships, launches have been delayed and roadmaps pushed back. Right now many companies are facing a four month delay in getting their products to shelves owing to the backups at the ports. System integrators are particularly hit hard as the uncertainty when components will arrive means that they cannot give their customers an accurate delivery date.

Many retailers keep months of supply in inventory and can clean on their distributor network for additional stock. However, new products from many Taiwanese vendors will have a tough time getting to the North American distribution network.

The PC component industry and seen its margins crushed in the past decade. The port delays for the past few months — essentially a fiscal quarter — are going to be painful for the cashflow of these companies. Many have begun to reroute to ports on the US east coast, or in Canada and Mexico but these are also costly delays to an industry feeling the pinch.