Supply Chain News / Risk & Compliance / Ports

Retailers to Longshoremen: Avoid Work Stoppage

July 10, 2012

In letters to James A. Capo and Harold J. Daggett, the Retail Industry Leaders Association (RILA) urged their respective organizations, the United States Maritime Alliance, Ltd. and International Longshoremen’s Association, to reach a contract agreement well in advance of the September 30, 2012 deadline in order to prevent a disruption to the flow of goods and the lasting economic affects that would result.

The ongoing labor negotiations affect 14 East and Gulf Coast ports, which together account for 95 percent of all containerized shipments to the Eastern seaboard, said RILA.

The retail industry relies on an efficient supply chain to ensure consumers have access to the products they seek at affordable prices, the group continued. 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.

“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.

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 September 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 September 30. Supply chain changes of this magnitude are not desirable to retailers because they take time both to implement and to reverse,” said Kennedy.

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