Washington, DC – The world’s largest retail trade association is urging both maritime management and the union representing dockworkers at US West Coast ports to “expedite pending contract negotiations and reach agreement on a new deal well in advance of the expiration of the current contract this summer.”
According to the National Retail Federation (NRF), speeded-up talks would “strengthen the supply chain and provide shippers and retailers the certainty they need to utilize the West Coast ports” during the critical holiday shipping period, which begins in July.
NRF President and CEO Matthew Shay voiced the organization’s concerns in a letter to the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which currently plan to start negotiations in mid-May.
“We urge you to begin contract negotiations now and to attempt to reach agreement on a new contract before the June 30 expiration,” he wrote. “These negotiations are important to all of the import and export and related industries who rely on these ports to move the nation’s commerce.”
In its letter, NRF urged the union and management to publicly commit to remaining at the negotiating table leading up to the June 30 contract deadline and to maintain service at the ports by continuing to negotiate even after the contract concludes.
“We would further ask that you issue a statement committing to the commencement of meaningful negotiations now, and to commit to continue negotiating and working without interruption or reduced productivity even if negotiations extend beyond the June 30th contract expiration,” Shay said.
Both the ILWU and the PMA, he added, “must recognize their role in the global economy and the need to ensure predictability and reliability for the many diverse stakeholders who rely on the ports.”
The pending contract covers nearly 14,000 ILWU jobs at 29 containerized ports in California, Oregon and Washington.
A successful contract negotiation is of critical interest to the NRF as a majority of imported retail goods are shipped through West Coast terminals and gates.
According to NRF’s Global Port Tracker report, the major ports along the US West Coast – Los Angeles, Long Beach, Oakland, Portland, Seattle and Tacoma – handled 11.2 million cargo containers in 2013, or 69 percent of the total at US retail container ports followed by the report.
Given the importance of the West Coast ports, retailers have already begun to develop alternative plans to ensure the proper flow of holiday merchandise.
“NRF’s members, as well as other stakeholders, have already begun contingency planning to ensure their cargo does not get caught in potential disruptions,” said Shay. “Any kind of disruption at the ports would add costly delays to our members’ supply chains and other industries relying on US West Coast ports, and it likely further threatens the fragile economic recovery.”
The last major supply chain disruption to affect the entire West Coast took place in the fall of 2002, when management locked out dockworkers for 10 days.
That prolonged work stoppage, which was ultimately stopped when President George W. Bush invoked the Taft-Hartley Act, significantly impacted the global supply chain and cost the economy between $500 million and $2 billion a day.