Peter T. Leach, Senior Editor | Jul 10, 2012 12:26PM EDT
The association representing the largest U.S. retail companies urged the International Longshoremen’s Association and United States Maritime Alliance to reach a contract agreement well in advance of the Sept. 30 deadline in order to prevent a disruption to the flow of goods and the lasting economic effects that would result.
In a letter sent Tuesday to the two sides in the labor negotiations, the Retail Industry Leaders Association said ports play a critical role in retailer supply chains and a potential disruption would be destructive to the retail industry’s ability to deliver goods to consumers in a “just in time” fashion.
While a work stoppage would be the most harmful outcome, RILA’s letter reminded negotiators that if the parties fail to reach an agreement well in advance of the Sept. 30 deadline, retailers would be forced to redirect shipments to the West Coast to avoid an interruption in the flow of goods.
The ILA and USMX met for two days of negotiations in late June and reported “substantial progress” in their talks.
They are scheduled to meet again on July 18 in Delray Beach, Fla.
The ongoing labor negotiations affect 14 East and Gulf Coast ports, which together account for 95 percent of all containerized shipments to the Eastern Seaboard.
“This potential disruption would be devastating to the retail industry as it would disrupt the flow of goods, resulting in lost sales and aggravated customers,” RILA President Sandy Kennedy said.
“(T)he absence of certainty over the outcome of the negotiations and facing the real possibility of a September stoppage, retailers have no choice but to continue planning for a shutdown. Indeed, some of our members advise that they are beginning to redirect their supply chains in order to allow adequate lead time to ensure that customer needs can continue to be met, regardless of whether the negotiations are successfully concluded by Sept. 30. Supply chain changes of this magnitude are not desirable to retailers because they take time both to implement and to reverse,” Kennedy said.
Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.
Discover supply chain analysis tips for doing business and building lead gen with JOC—that you can start using today — when you download JOC Insights for FREE right now.