Trade Groups Urge President Obama to Action on Potential East Coast Port Strike

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

Washington—In what promises to be yet another countdown to potential financial disaster facing the country, additional trade groups are joining the chorus urging President Obama to intervene in what should be a strike affecting all East Coast ports.

Although another round of talks are scheduled this week between International Longshoremen’s Association (ILA) and the United States Maritime Alliance, Ltd. along with federal mediators, little progress in reaching an agreement has been made.

If a new contract isn’t decided upon by Dec. 29, a port strike would in all likelihood go into affect, disrupting or delaying spring and summer retail merchandise entering the country in 15 key container ports: Boston, New York/New Jersey, Delaware River, Baltimore, Hampton Roads, Wilmington, Charleston, Savannah, Jacksonville, Port Everglades, Miami, Tampa, Mobile, New Orleans, and Houston.

The contract between the ILA and the United States Maritime Alliance covers 65,000 workers at East Coast and Gulf Coast ports, including New Jersey and New York, where it covers about 5,000 longshoremen.

New York and New Jersey longshoremen voted to authorize a strike in August if negotiations did not yield a deal, but the expiration deadline of Oct. 1 was extended for three months to prevent disruption in the ports.

On Monday, the National Retail Federation (NRF) sent a letter to Obama asking him to intercede to avoid a strike that could prove “devastating for the U.S. economy.”

‘All Means Necessary’ to Prevent Strike

“We call upon you to use all means necessary, including Taft-Hartley, to keep the two sides at the negotiating table and head off a coast-wide strike,” wrote Matthew Shay, NRF’s president/ceo. The American Apparel and Footwear Association sent a similar letter last week.

The Retail Industry Leaders Association (RILA), a trade group that includes Walmart, Target, VF Corp and others, also sent a letter urging both sides to come to an agreement soon.

“It is vital that a disruption of business is prevented on the Eastern seaboard to avoid further negative impacts on our fragile economy,” Sandra Kennedy, RILA president, said in the letter.

In the event of a strike or lockout, under the Taft-Hartley Act, President Obama could end the job action and force the two sides back to the negotiating table. He refused to invoke the act to order workers back during the recent Ports of Los Angeles and Long Beach strikes, but those ports account for a smaller portion of U.S. container shipping, about 35%.

The last time the Act, which seeks to protect the free flow of commerce, was invoked was by President George W. Bush during the 2002 West Coast ports lockout. Economists estimate that the ‘02 10-day lockout cost the U.S. economy $1 billion a day and took more than six months for the supply chain to recover.

While Obama has been reluctant to interfere in labor disputes given the strong support he received from labor unions in his reelection campaign, the president may be forced to use Taft-Hartley in this case because the impact of a strike would be so widespread.

“There hasn’t been an East Coast strike since ’77, but it’s got people very worried,” said Jon Gold, vice president of supply chain and customs policy for NRF.

Spokespersons for both sides said talks continue today and this week but declined to give any hint whether the two sides were any closer to an agreement.

“We cannot afford further supply chain disruptions as we enter 2013,” Shay said. “The two sides must remain at the negotiating table until a deal is reached.”