Retail groups renew call for White House to step in to labor talks at West Coast ports

The National Retail Federation (NRF) today joined the Retail Industry Leaders Association (RILA) in calling on the Biden Administration to intervene in faltering West Coast port labor negotiations after container facilities from California to Washington shut down over the weekend when workers walked off the job.

The labor disruptions come as the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) have failed to reach and ratify a new labor agreement following more than a year of negotiations.

The work stoppage slowed operations at sites including the Ports of Oakland and Los Angeles over the weekend. That was shown by data from supply visibility provider Project44 revealing “an immediate and significant impact” on import and export dwell time out of these ports. Those numbers include a rise in projected export dwell time in the port of Los Angeles from 6.1 days on June 1 before the closures to 11 days on June 4. And likewise, export dwell time is set to rise at the Port of Long Beach from 1.3 days before closure to 7.3 days afterwords.

By slowing or stopping operations at ports up and down the West Coast, the labor pressure could trigger downstream impacts to sectors from retail sales to industrial real estate and supply chain functions, according to the global real estate services firm Savills. When containers stop moving, related effects could keep trucks idling as they wait to haul import freight and it could force ships to remain at sea unloaded, the firm said.

In fact, West Coast ports were already losing market share before the recent stoppage as shippers looked to avoid such delays, according to Savills’ 2023 Ports Report. That trend has already pushed the industrial vacancy rate in Los Angeles up by 170 basis points (bps) over the past year, with some of the greatest increases occurring in port-adjacent submarkets.

Now, following the current work slowdown, additional fallout could include further steps by retailers, manufacturers, and third party logistics providers (3PLs) to shift shipments to East and Gulf Coast seaport markets like Houston, Savannah, and New Jersey, Savills said.

So far, overall congestion levels at West Coast ports are still limited, but the ripple effect of these individual actions will contribute to the build-up of container backlogs, and increase yard congestion just ahead of the start to the back-to-school retail shipping season, according to an email statement by Mirko Woitzik, global director of intelligence solutions at Everstream Analytics. And if the strike actions persist for a number of days or spread to other terminals along the U.S. West Coast, vessel diversions could follow, he said.

The NRF pointed to those impacts as it called for federal intervention in the contract talks. “As we enter the peak shipping season for the holidays, these additional disruptions will force retailers and other important shipping partners to continue to shift cargo away from the West Coast ports until a new labor contract is established,” NRF’s senior vice president of government relations, David French, said in a release. “It is imperative that the parties return to the negotiating table. We urge the administration to mediate to ensure the parties quickly finalize a new contract without additional disruptions.”