Is a “Container Cliff” Fast Approaching?

In Industry News, Reports, What's New by Jeff PrineLeave a Comment

Imports of spring merchandise could come to a stand still at all major East Coast ports on Dec. 29 unless an agreement is reached soon.

Washington—If haggling between President Obama and Congress over the impending fiscal cliff on Jan. 1 isn’t bad enough, retailers and importers are warning about the “container cliff” which could hit even earlier, Dec. 29.

Fears about the International Longshoreman’s Association going on strike at 15 East Coast ports, which handle some 95% of all containerized shipments, were heightened this week as talks broke down among the parties. The United States Maritime Alliance, which runs the ports, has been at the table with the longshoremen and a federal mediator, who has proposed a short contract extension.

Both sides of the labor dispute blame the other for the breakdown of negotiations. The impasse comes during a 90-day extension of the current contract. On Tuesday, a federal mediator offered another month long extension. Various issues, including wages, are unresolved, but the sides couldn’t agree on what’s become the key sticking point, container royalties.

Retail trade groups, including the National Retail Federation (NRF), American Apparel and Footwear Association (AAFA) and Retail Industry Leaders Association (RILA) have been urging all parties to find a solution and avoid what could be devastating blow to the U.S. economy should imports for spring come to a stand still.

‘A National Economic Emergency’

NRF asked President Obama to use “all means necessary” to prevent a strike, even invoking the Taft-Hartley Act to force workers back on the job if need be.

“We foresee this as a national economic emergency, to be honest,” said Jonathan Gold, NRF vice president of supply chain and customs policy.

“It is imperative that both sides verbally announce their intentions to return to the negotiations. A coast-wide port shutdown would have a significant impact across all businesses and industries that rely on the ports, particularly retail,” Gold said.

“The last thing the economy needs right now is another strike, which would impact all international trade and commerce at the nation’s East and Gulf Coast container ports. This is truly a ‘container cliff’ in the making.”

“To allow these same events to occur coast-wide in East and Gulf Coast ports from Texas to Maine, at a time when our nation relies on efficient ports more than ever, would be inexcusable,” said AAFA’s David Lapidus. “Retailers, importers, manufacturers, and concerned U.S. consumers must all come together and make the critical nature of ports understood to the American public and to our country’s leaders, so they may exert their influence to avoid a coast-wide labor strike before it is too late.”

While any port strike wouldn’t affect passenger cruise ships, U.S. mail, military cargo or perishable cargo, as well as non-container or break bulk shipments, it would affect most retail merchandise categories especially apparel, accessories and footwear, where imports account for more than 90% of the product.



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