The Retail Industry Leaders Association (RILA) urged the International Longshoremen’s Association and the 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.
The ongoing labor negotiations affect 14 East and Gulf Coast ports, which together account for 95% 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,” said RILA president Sandy Kennedy.
Ports play a critical role in the supply chain, and a potential disruption would be destructive to the retail industry’s ability to deliver their goods to consumers in a “just in time” fashion, according to RILA.
While a work stoppage would be the most harmful outcome, the letter reminded negotiators that if the parties fail to reach an agreement well in advance of the Sept. 30 deadline, retailers will be forced to redirect shipments in order to avoid an interruption in the flow of goods.
“[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,” said Kennedy.
Home Depot CEO Frank Blake and Lowe’s CEO Robert Niblock are both board members of RILA.