The National Industrial Transportation League, the largest organization in the country representing shippers, is seeking the assistance of U.S. Transportation Secretary Ray LaHood to get contract talks restarted between dockworkers on the East and Gulf coasts and their employers.
"We are seeking your help in urging the International Longshoremen’s Association (ILA) representing port labor and the U.S. Maritime Alliance (USMX) representing management to resume talks aimed at reaching a new labor contract," said a letter that was sent yesterday by Bruce Carlton, president and chief executive officer of the NIT League.
Meanwhile, the Retail Industry Leaders Association (RILA) sent a letter today to James Capo, chairman and CEO of USMX, and ILA President Harold J. Daggett urging them to “work to continue their efforts to swiftly negotiate a viable agreement” before the contract expires at the end of September.
“While we adamantly urge you to return to the table, it is crucial that a disruption of business is prevented. Therefore, as a last resort we would advise a 45-day extension to allow merchandise to arrive for the holiday season,” wrote RILA President Sandy Kennedy.
Carlton told LaHood the NIT League believes “it is best for the two sides to reach an amicable accord, this cannot occur without the two sides resuming talks. We respectfully request your help in strongly encouraging the two sides to get back to the bargaining table. Only as a last resort should other measures be considered to head off a port work stoppage. It is our first hope and desire that with your encouragement labor and management will recognize the need to find common ground."
Carlton noted with the current contract set to expire at the end of next month and a vote by an ILA local chapter on Tuesday evening to authorize a strike the NIT League "is extremely concerned about the dire consequences that would impact the nation’s freight system and our economy as a result of a bicoastal port shutdown. We need look no further than the devastating consequences of the West coast port lockout in 2002."
That 10-day stoppage was only ended after President Bush used the Taft-Hartley Act to end a lockout of dockworkers.
"Already league members have had to put in place costly contingency plans to ameliorate the impacts of a potential work stoppage. Any backup of freight and equipment in the affected ports will have a domino effect on domestic transportation systems resulting in costly delays, supply disruptions and scheduling hardships on customers. Now that there is a real risk of a major port disruption due to the break-off in talks and the latest calls authorizing strike actions, manufacturers, farmers, retailers and others are being hit right now with uncertainty and doubtless additional costs," Carlton said.
"Their difficulties will be compounded if port work stops; the broader negative consequences would be a most unwelcome shock to what is already a fragile economy," he added.
"The potential magnitude of the negative effects of a work stoppage can be illustrated by example. U.S. auto plants and their employees depend on the timely delivery of parts to remain operational. The failure to receive on-time a single component can result in plant shutdowns," he said.
Carlton also noted that manufacturers have reduced costly warehouse inventories and depend on transportation supply-chains that can deliver just-in-time. "Our resurgent auto industry will be severely jeopardized if a new port labor agreement is not concluded soon. This scenario will be replicated across the nation’s economy," he said.
Meghan Keck, a spokeswoman for the DOT, confirmed the department had received the NIT League letter and was "monitoring the situation and encouraging the two parties to continue talking."
Jim McNamara, a spokesman for the ILA, said Daggett called DOT's Deputy Transportation Secretary John Porcari last Wednesday when ILA-USMX negotiations ended abruptly and the union has been keeping both DOT and Richard Lidinsky, chairman of the Federal Maritime Commission, apprised of the negotiations.
RILA’s Kennedy said “if an agreement is not reached by the September 30th deadline, the disruption that seems imminent would impact the entire industry by seriously impeding the flow of commerce during a peak shipping season. RILA's members are some of the world's largest supply chain users and they rely on an efficient transportation system every day of the year. With the upcoming holiday season fast approaching, RILA and every retailer we represent is dependent on both of your organizations to meet on a final agreement.”
Kennedy added that “retailers already have contingency plans in place and are beginning to redirect their supply chains in order to allow adequate lead-time to ensure that customer needs can continue to be met.
“Moreover, as the expiration date of the current contract draws nearer, the shifting of freight to alternative ports will continue to materialize as it will be allocated to more dependable gateways. Due to the timing of ocean transit to the East Coast, retailers must make decisions to redirect cargo now. Furthermore, a last minute settlement could significantly reduce cargo to these ports for weeks or even months," wrote Kennedy. "Supply chain changes of this magnitude are undesirable to retailers due to the time they take to both implement and reverse. However, our members must consider the needs of their customers and businesses as they navigate this difficult situation.” - Chris Dupin