A breakdown in contract negotiations between labor and management at America’s west coast ports is threatening to turn a work slowdown into a full-scale strike, the Retail Industry Leaders Association (RILA) warned.
On Wednesday, talks between the Pacific Maritime Association (PMA) representing port management, and the International Longshore and Warehouse Union (ILWU) officially broke down. Without an agreement, experts have suggested that nearly 30 west coast ports could be shut down within a week. According to reports, the two sides remain at odds on several issues, including wages, pensions and arbitration to settle contract disputes.
A work slowdown during contract negotiations over the past seven months has already created logistic nightmares for American exporters, manufacturers and retailers dependent on an efficient supply chain. The congestion has been most pronounced at Los Angeles and Long Beach, Reuters reported, with port authorities reporting more than 20 freighters left idled at anchor, waiting for berths to open up, over the past two days.
A complete shutdown would be catastrophic, with hundreds of thousands of jobs at risk if America’s supply chain grinds to a halt, according to RILA.
"A west coast port shutdown would be an economic disaster," said Kelly Kolb, VP of government affairs for RILA. “A shutdown would not only impact the hundreds of thousands of jobs working directly in America’s transportation supply chain, but the reality is the entire economy would be impacted as exports sit on docks and imports sit in the harbor waiting for manufacturers to build products and retailers to stock shelves. For retailers specifically, a shutdown will have dire consequences for those dependent on spring inventory demand.”
The last prolonged port shutdown of the West Coast ports was the 10-day lockout in 2002 which was estimated to cost the U.S. economy close to $1 billion a day. The companies imposed a lockout that was lifted 10 days later under a court order sought by President George W. Bush.
“A port shutdown of even a short duration could de-rail economic growth and cause long-lasting damage and job losses across the country,” said Kolb. “There needs to be a greater sense of urgency at the White House, before it’s too late.”
[This article first appeared in HBSDealer's sister publication Chain Store Age.]