A Friday announcement that labor and management at America’s West Coast ports had reached a tentative agreement on a new 5-year contract brought a sigh of relief from America’s retailers that were being stretched to the limit as a work slowdown threatened vital transportation supply chains.
Retailers have warned for months that the impasse in negotiations was creating an economic challenge, and that a full-scale strike would negatively impact the entire American economy. Farmers and manufacturers were also reporting a heavy toll as agriculture exports suffered and part shortages were leading to factory slowdowns for some automakers.
“After months of congestion and the very real possibility of a debilitating shutdown, retailers are relieved to see a deal in place, and anxious to see the ports up and running at full capacity,” said Kelly Kolb, vice president of government affairs for the Retail Industry Leaders Association. “It will take months for business to return to normal, but this is obviously a huge first step in the right direction.”
While the new contract is a welcome relief, there are other underlying factors and infrastructure challenges that, together, create an unsustainable trajectory for the future operations of our nation’s sea ports. In coming years, freight volumes are expected to double, and the pressure on our nation’s ports and supply chain will only increase.
“Today’s slowdown on the West Coast may be the result of contract negotiations, but the impact its had on retailers provides a window into the future as increasing volumes and complexity will create similar backups, delays, higher costs and lost productivity,” said Kolb. “Now is the time to address the challenges that could disrupt that growth, and prepare ourselves for a future that gives American workers the opportunity to reap the benefits of an expanding global economy.”
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.