Massive port strike begins across America’s East Coast | US DOL recovers wages from Primex Plastics | Rackspace suffered a data breach e

In today’s Portfolio Intelligence Daily: 

• Massive port strike begins across America’s East Coast
• US DOL recovers wages from Primex Plastics
• Rackspace suffered a data breach exposing customer monitoring data

Our analyst team curates these summaries from Auquan’s Intelligence Engine, which uses generative AI and retrieval augmented generation (RAG) to uncover material non-financial insights at scale to support deal sourcing, due diligence, risk monitoring, and compliance.

Industry trends:

• The magic of RAG is in the retrieval (InfoWorld) — Retrieval-augmented generation (RAG) and AI agents are transforming how AI can automate knowledge work in the enterprise.
• Tackling Information Overload in the Age of AI [private credit] (TDWI Upside)
• Why AI is finally catching up with financial services (Maddyness)

Massive port strike begins across America’s East Coast

Massive port strike begins across America’s East Coast as dock workers walk off the job, impacting supply chains and the economy.

• The strike commenced at 12:01 a.m. ET on October 1, 2024, involving approximately 45,000 members of the International Longshoremen's Association (ILA) at 36 ports along the East and Gulf Coasts, marking the first such action since 1977 due to unresolved contract negotiations over wages and automation issues. 

• Analysts estimate that the strike could cost the U.S. economy between $4.5 billion and $7.5 billion weekly, potentially leading to a 0.1 percent decline in annual GDP. The transportation and warehousing sectors are expected to feel the initial pinch, with broader implications if the strike continues. 

• The work stoppage threatens to disrupt the supply of various goods, including bananas, automobiles, and beverages, which are heavily reliant on East Coast ports. Experts predict that shortages could begin to manifest within two to three weeks if the strike persists.

• In anticipation of potential disruptions, businesses have begun rerouting shipments to West Coast ports and increasing inventory levels. However, capacity limitations at these ports may lead to further delays and increased shipping costs as companies adapt to the ongoing situation.

Select timeline

• Oct 2, 2024 | What products could be affected by the port strike? (CBS News)
• Oct 1, 2024 | How the Dockworkers’ Strike Could Ripple Through the Economy (New York Times)
• Oct 1, 2024 | US ports strike causes first shutdown in 50 years (BBC News)

US DOL recovers wages from Primex Plastics

The U.S. Department of Labor has recovered $154,009 in back wages and damages from Primex Plastics Corp. for failing to include bonus payments in overtime calculations for 743 workers.

• Primex Plastics Corp. agreed to pay $128,589 in civil penalties due to the willful nature of their wage violations, as determined by an investigation.
• The investigation reviewed records from June 27, 2020, to June 26, 2022, and found that Primex Plastics had a history of overtime violations, including prior recoveries of $203,960 in 2010 and 2011.
• Wage and Hour Division District Director Steven Salazar emphasized that employers must include non-discretionary bonuses when calculating overtime wages.
• Despite receiving compliance guidance from investigators during previous inquiries, Primex Plastics Corp. failed to correct their pay practices, leading to the recent enforcement action.

Select timeline

• Oct 01, 2024 | Primex Plastics pays workers $154,009 in back wages (Plastics News)
• Oct 01, 2024 | Plastics Manufacturer Caught Willfully Withholding Overtime Pay (Manufacturing.net)
• Sep 30, 2024 | US Department of Labor recovers $154K in back wages, damages from Georgia plastics manufacturer that shortchanged 743 workers of full overtime (U.S. Department of Labor)

Rackspace suffered a data breach exposing customer monitoring data

Rackspace, a multi-cloud company from Texas, suffered a data breach exposing customer monitoring data due to a zero-day vulnerability in a third-party application. 

• On September 24, 2024, Rackspace discovered that attackers exploited a zero-day vulnerability in a non-Rackspace third-party application bundled with ScienceLogic's SL1 platform, leading to unauthorized access to its internal performance monitoring system. 

• The breach allowed access to limited customer monitoring data, including account names, usernames, device information, IP addresses, and encrypted internal device agent credentials. Rackspace assured customers that no other services were affected and that performance monitoring remained intact. 

• Following the breach's discovery, Rackspace temporarily disabled its monitoring dashboard for customers and collaborated with ScienceLogic to develop a patch for the vulnerability. The company also initiated a rotation of internal device agent credentials as a precautionary measure. 

• Rackspace has informed all affected customers about the breach and reassured them that no action is required on their part at this time. They are continuing to provide updates as necessary while working to restore full functionality of the monitoring services. 

Select timeline

• Oct 1, 2024 | Rackspace confirms zero-day exploit in third-party app led to security breach (Tech monitor)
• Oct 1, 2024 | Rackspace internal systems hit by security threat, customer data exposed (Tech radar)
• Oct 1, 2024 | Third Party Zero-Day Bug Exploited in Rackspace Systems (Bank info security)

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