In light of the postponed
negotiations between the International Longshoremen’s Association and the
United States Maritime Alliance, Ltd., the Retail Industry Leaders Association
(RILA) sent a letter today, urging the two parties to continue negotiations in
order to reach a contract agreement before the September 30 deadline.
“As negotiations falter,
retailers are urging both sides to get back to the negotiating table and avert
what would be a disastrous strike this fall. A disruption of this magnitude would
be devastating to the retail industry and would have severe consequences for
the U.S. economy,” said RILA president Sandy Kennedy.
The potential strike would affect
14 East and Gulf Coast ports, which would force retailers to redirect their
supply chains during the crucial period before the holiday shopping season. The
disruption would impact the entire industry during a peak shipping season and
seriously impede the flow of commerce. Supply chain changes of this magnitude
are undesirable to retailers due to the time they take to both implement and
“We understand the negotiations
themselves have many complicated components that need to be addressed, but
we’re also aware of the potential short and long term consequences that will
occur if cargo is diverted from the East and Gulf Coast ports,” said
Kennedy. “The negative impact a strike would have on retailers and our
overall economy cannot be overstated.”
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.
August 29, 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
International Longshoremen’s Association
5000 West Side Avenue, Suite 100
North Bergen, New Jersey 07047
Dear Mr. Capo and Mr. Daggett:
On behalf of the members
represented by the Retail Industry Leaders Association (RILA), I urge you to
return to the bargaining table to avoid a port labor disruption which will
significantly impact the customers on which you both rely. You may remember
that I wrote to you earlier this summer requesting your leadership to help
prevent the potential shutdown of port activity along the entire Eastern and
Gulf seaboard. While we saw progress in July it has become evident that these
discussions are quickly faltering and will likely result in a strike this fall.
We find this development incredibly discouraging. We are extremely disappointed
as a potential disruption would be devastating to the retail industry and could
cause lasting damages to the U.S. economy.
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
facilitates and distribution centers domestically and abroad.
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. We understand the negotiations themselves have many
complicated components that need to be addressed, but we’re also aware of the
potential short and long term economic consequences that will occur if cargo is
diverted from the East and Gulf Coast ports.
As the negotiations continue to
breakdown, it is becoming more and more evident that the threat of a strike is
growing stronger. This culminated with today’s news cycle reporting that a vote
to strike has already occurred. In preparation, 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
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.
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
It is for these reasons, RILA and
our member companies strongly encourage both parties to work to continue their
efforts to swiftly negotiate a viable agreement. 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.
The current activity that exists
at the negotiating table is discouraging and we urge both parties to actively
consider the potential harm a disruption would cause to the shipping industry
and our economy. We are hopeful that an agreement will ensue in the coming
days. If you have any questions or concerns, please contact Kelly Kolb, vice
president, government affairs at (email@example.com)
Sandra L. Kennedy