U.S.-based retailers have a rapidly shrinking window to execute contingency plans that would get their goods into U.S. commerce by Sept. 30, the date dockworkers at 13 U.S. and Gulf Coast ports could walk off their jobs if a new contract isn't reached by then, a top retail association executive said today.
Jonathan Gold, vice president of supply chain and customs policy of the National Retail Federation (NRF) said in an e-mail that the group's members "need to make their decisions within the next week" if they are going to implement alternate strategies that ensures their holiday cargoes enter the U.S. well before the shopping season commences.
"These plans carry great expense but they are necessary to avoid disruptions that will add costly delays to our members' supply chains." NRF President Matthew Shay said in a separate letter today to Harold Daggett, international president of the International Longshoremen's Association (ILA), and James Capo, chairman and CEO of the United States Maritime Alliance (USMX), which represents ship management at the affected ports.
The most commonly cited contingency would be to divert deliveries to West Coast ports from East Coast and Gulf Coast ports. Yet such a move involves costs and would trigger congestion at West Coast ports. Companies that follow such a plan could also still run into labor problems because the International Longshore and Warehouse Union (ILWU), which represents West Coast dockworkers, has already expressed solidarity with its ILA brethren.
The retail supply chain has watched uneasily for months as the ILA and USMX exchanged proposals as well as rhetoric. The concern was dramatically ratcheted up last week after both sides suddenly broke off contract talks in Florida after the first of three scheduled days of meetings. No new talks are planned, and a strike looks more likely now than at any time since the start of the year.
Earlier this month, both sides had reported progress on key issues, notably the increasing use of automation at the ports. Management believes more technology is needed to efficiently manage the flow of larger vessels each carrying thousands of cargo containers. The union said it recognizes the role of automation but has vowed that its use will not come at the expense of its members' wages and benefits.