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Retailer’s Supply Chain in Jeopardy if Port Strike is Not Averted

While the call for Obama to invoke the Taft Hartley may seem extreme, it is not without recent precedent.
By Patrick Burnson
December 20, 2012

In two separate letters, The National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) called upon President Obama to engage directly in contract negotiations between the International Longshoremen’s Association and the United States Maritime Alliance, Ltd.

“It is extremely disheartening to learn that the two sides have yet to reach an agreement,” said NRF Vice President for Supply Chain and Customs Policy, Jonathan Gold.

While the call for Obama to invoke the Taft Hartley may seem extreme, it is not without recent precedent. George W. Bush did so ten years ago when the International Longshore and Warehouse Union (LWU) failed to come to terms with terminal operators on the West Coast.

In 2002, the West Coast work stoppage caused an estimated $15 billion in reported losses. Last month, an 8-day work stoppage at the Ports of Los Angeles and Long Beach caused shipping delays for hundreds of millions of dollars in cargo. The 14 ports potentially affected by a strike account for 95 percent of all containerized shipments offloaded on the Eastern seaboard.

Meanwhile, the NRF is urging both sides to remain at the table until a deal is reached.?

“It is imperative that both sides verbally announce their intentions to return to the negotiations. A coast-wide port shutdown would have a significant impact across all businesses and industries that rely on the ports, particularly retail,” said Gold.

?“The last thing the economy needs right now is another strike, which would impact all international trade and commerce at the nation’s East and Gulf Coast container ports. This is truly a ‘container cliff’ in the making.”

RILA President Sandy Kennedy also asked President Obama to take action to prevent a work stoppage at the East and Gulf Coast ports:

“RILA is extremely concerned about the potential short and long term consequences to our members, their employees and customers as well as to the economy if cargo is stalled along the East and Gulf Coast ports,” said Kennedy. “If a work stoppage occurs at the end of the month, it will substantially affect the already delicate economy.”

Gold told Logistics Management —SCMR’s sister publication—that shippers have few options if a strike does take place on December 29.

“A few of our members may opt for air cargo, but only in extreme cases,” he said. “They may also divert shipments to Canadian ports which have separate agreements with organized labor.”


About the Author

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Patrick Burnson
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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