Retail groups seize "Kumbaya moment" and urge ILA, management to make peace on East, Gulf Coasts

The nation's two biggest retail trade associations, looking to strike while the iron of waterfront labor-management harmony is still warm, yesterday asked dockworkers and shipping executives on the East and Gulf Coasts to end their long-simmering contract dispute. If left unresolved, the dispute threatens to disrupt operations at 13 of the nation's ports.

Writing separate letters but conveying similar messages, the National Retail Federation and the Retail Industry Leaders Association urged the International Longshoremen's Association and the United States Maritime Alliance to come to terms before Dec. 29, the day a 90-day extension of their current contract expires. The two sides agreed to an extension to avert a possible work stoppage when their contract expired Sept. 30.

The pleas from the retailers come two days after clerical workers and management at the Ports of Los Angeles and Long Beach agreed on a six-year contract and ended an eight-day strike that virtually shut Los Angeles, the nation's busiest seaport, and curtailed business at Long Beach, the second-largest.

In the letter, NRF said a fast resolution of the dispute in the East and on the Gulf is critical to prevent further disruptions to a seagoing supply chain already buffeted by the ILA-USMX fight; Superstorm Sandy, which closed the Port of New York and New Jersey; and the strike at Los Angeles and Long Beach.

"We understand and recognize that there are tough issues that need to be resolved," NRF President and CEO Matthew Shay wrote. "The issues will only be resolved, however, by agreeing to stay at the negotiating table until a final deal is reached. Failure to reach agreement will lead to supply chain disruptions which could seriously harm the U.S. economy."

Sandra Kennedy, president of RILA, wrote that the inability for the two sides to come to terms by year's end would severely disrupt shipping plans for the spring buying season in the United States. A work stoppage, she wrote, "would not only result in hardships for retailers and their customers, but also for the ports and the millions of workers that count on an uninterrupted supply chain to earn their living."

The ILA and USMX remain at loggerheads, with neither side willing to accede to the other's core demands. USMX says the ILA has failed to consider adopting any changes to archaic work rules at the 13 ports and that the union reaps the benefits of millions of dollars in pay and benefits for time not worked. The ILA accuses management of forcing the union to give up an eight-hour work guarantee that has been standard practice for years and wanting to radically change contract language governing the payment of worker overtime. Neither side was available to comment on whether the contract resolution on the West Coast would influence the future direction of the negotiations.

Talks are scheduled to resume next week under the supervision of the Federal Mediation & Conciliation Service (FMCS), an independent government agency tasked with keeping labor-management peace. FMCS officials had flown to Los Angeles after being asked by labor and management to mediate their dispute. However, the six-year contract had essentially been agreed to by the time the mediators got involved.

Worries over a possible shutdown in the East and on the Gulf prompted some retailers during late summer to start diverting deliveries to West Coast ports to ensure they were in U.S. commerce in time for the holidays.

Jonathan Gold, NRF's vice president for supply chain and customs policy, said importers began shifting their destinations in November for cargoes due to reach the U.S. in January. Those plans, Gold said, have not changed because they dealt with cargo arriving after the holidays.

Decisions to shift deliveries in anticipation of a work stoppage in the East were made well in advance of the breakdown of negotiations at Los Angeles and Long Beach and the subsequent strike, Gold said. Those talks broke off in October. The strike was called by clerical workers on Nov. 27.