Event: Labour strike, 2019
In November 2019, the Port of Valparaiso faced disruption due to a nationwide strike. The strike involved many sectors and industries, with protesters calling for economic and political reforms and a higher minimum wage. Tensions continued to flare between stevedores and truck drivers until January 2020 (The Maritime Executive, 2019).
Causes and impact13
The strike is the main factor causing the disruption, which led to reduced port and hinterland accessibility. Several factors amplified the disruption, namely: (i) The lack of a national legal framework to sustain port specialization and cooperation; (ii) the rapid upsizing of container vessels and consequent pressure in infrastructure investments; and (iii) the high reliance on road transport as the only connection to inland destinations (Merck O., 2016).
The combined effect of recurrent strikes in the transport chain (the fact that stevedores and trucks drivers were both on strike) meant that port operations were severely affected.14As the port depends entirely on road transport for hinterland access, road congestion directly affected the port. In addition to congestion, other ripple effects include air pollution and disruption of Chile’s fruit exporting industry.
Response and mitigation measures
The Port of Valparaiso had limited scope to mitigate the effects of labour strike, or the congestion that was caused, including overland activities.
However, experience derived from the COVID-19 pandemic provided measures to address the disruption and associated bottlenecks. The port implemented health and safety protocols for protecting both employees and people interacting with the terminal to ensure business continuity (OECD, 2019). The remote document endorsement was put in place to enable customers and customs to operate remotely and maintain social distancing. The port also supported suppliers by providing early invoice payments. (Terminal Pacifico sur Valparaiso, 2020).
Lessons learned and good practice15
- Invest in and implement digital solutions and technological advancements, including Port Community System (PCS).
- Enable hinterland digital connectivity, including by implementing solutions that monitor the trucks and cargo to/from ports.
- Avoid traffic through the city and facilitate real-time visibility over road networks.
- Establish long-term partnerships with key freight forwarding stakeholders and create shared value across local communities (e.g. early invoice payment) (AIVP.ORG, 2021).
- Promote long-term port labour agreements and improve basic working conditions.
- Diversify transport options connecting ports to their hinterland.
- Adopt a unified port and logistics strategy at the national level to avoid ports’ fragmentation (IKONS ATN, 2020).
- Ensure transparency when setting port tariffs and avoid discriminatory practices.