In a letter sent today, the Retail Industry Leaders Association (RILA) urged the International Longshoremen’s Association and the United States Maritime Alliance, Ltd. to reach a contract agreement well in advance of the September 30 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.
The retail industry relies on an efficient supply chain to ensure consumers have access to the products they seek at affordable prices. 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.
Click here for a copy of the letter.
The full text of the letter is below.
RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
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July 10, 2012
Mr. James A. Capo Chairman and Chief Executive Officer United States Maritime Alliance, Ltd. 485C US Highway 1 South, Suite 100 Iselin, New Jersey 08830
Mr. Harold J. Daggett President International Longshoremen’s Association 5000 West Side Avenue, Suite 100 North Bergen, NJ 07047
Dear Mr. Capo and Mr. Daggett:
On behalf of the Retail Industry Leaders Association (RILA), I write to ask for your leadership to help prevent a potential shutdown of port activity along the entire Eastern seaboard this fall. 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. Negotiations have been materializing for quite some time, but with the current contract’s deadline only two months away, we urge your leadership in negotiating a master contract that is agreeable to both parties as soon as possible.
By way of background, RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
RILA’s membership consists of some of the largest users of the supply chain that rely on an efficient transportation system every day of the year. At the ports, products are moved from ocean carriers and onto rails and trucks, and then delivered to distribution facilities and stores. Since the usage of port facilities is a fundamental dynamic in the movement of our goods, any potential disruptions in that link would be detrimental to the retail industry’s ability to deliver their goods in a “just in time” fashion.
It’s been reported that the East and Gulf Coast ports received 110 million tons of import and export cargo, accounting for 95 percent of all containerized shipments from Maine to Texas last year. These numbers will surely be jeopardized if a disruption exists.
In fact, in the 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.
As discussions continue later this month, RILA strongly encourages both parties to negotiate an agreement that would prevent a strike and allow the retail industry to continue to deliver products on time and at competitive prices. If you have any questions or concerns, please contact Kelly Kolb, vice president, government affairs at (kelly.kolb@rila.org) or 703.600.2064
Sincerely,
Sandy Kennedy President
Brian Dodge SVP, Communications & State Affairs Phone: 703-600-2017 Email: brian.dodge@rila.org