NRF to East Coast Union, Ports: Restart Negotiations ‘As Soon As Possible’
The National Retail Federation (NRF) is urging East Coast and Gulf Coast port dockworkers and their maritime employers to get back to the bargaining table ahead of their current labor contract’s expiration on Sept. 30.
In a letter to International Longshoremen’s Association (ILA) president Harold Daggett and United States Maritime Alliance (USMX) chairman and CEO David Adam, NRF president and CEO Matthew Shay shared the trade association’s concerns that “the discussions have been on hold for months and talk of potential disruptions has increased.”
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While Shay said he was encouraged by the initial discussions between both parties, he pressed both sides to restart negotiations “as soon as possible.”
Contract negotiations for some 70,000 dockworkers across 36 ports from Maine to Texas began in February 2023, but largely simmered out on a national level in October after the ILA and USMX failed to agree on wage increases, according to Daggett. They’ve since been mum on negotiation details.
Jonathan Gold, vice president, supply chain and customs policy at the NRF, said the group is worried that union members would strike if there’s no deal by their deadline.
“We know that these kinds of negotiations take a while, and we know there are some significant issues that need to be discussed. Everything from wages, to the benefits, to automation and technology, they’re all very important issues need to be discussed,” Gold told Sourcing Journal. “We’re not a party to the contract, and to the negotiations, but the party can’t come to an agreement if they’re not at the table having these discussions.”
Sourcing Journal reached out to the ILA and USMX for comment.
This is the second year running that dockworkers and their employers are locked in months-long contract negotiations.
But last year, the union dockworkers representing the International Longshore and Warehouse Union (ILWU) continued working for roughly 11 months after their original contract expired on July 1, 2022 before a deal was struck last June. The new contract resulted in a new six-year contract covering workers at all 29 ports from Washington to California.
The West Coast negotiations caused some disruption in the weeks before a deal was made, including some worker walkouts, but the East Coast discussions seemingly have more at stake given the current geopolitical landscape.
One difference between the West Coast negotiations and those at the East Coast and Gulf Coast ports is the bottlenecks in two major global chokepoints—the Panama Canal and the Suez Canal.
On one hand, the Panama Canal is restricting and vessel activity the gateway, while cargo ships are avoiding the embattled Suez Canal.
If these are still problems when the peak shipping season arrives, Gold said retailers are likely to revert to the 2023 playbook they adpoted before the West Coast labor deal was finalized.
“Retailers are going to look to bring product in earlier. They’re going to shift the ports they’re using, and that’s going to cause disruption and other congestion events at other ports,” Gold said. “That’s what can happen if planning isn’t done appropriately. We can end up with that congestion once again, and that’s the last thing anybody wants.”
Gold said some retailers may shift more of their goods to travel via air cargo, noting that the alternatives are likely to depend on the retailer and their overall product mix. Shay warned of coast-wide disruption, noting that retailers and others businesses could shift operations away from the East Coast and Gulf Coast ports.
“All that discretionary cargo that left the West Coast, and went to the East Coast and Gulf Coast, that could shift back,” Gold said. “That all depends on how things go, where the status of the negotiations are, and again, what level of risk the retailers want to take on.”
If the talks do get down to the wire, Gold said he expects the Biden administration to follow the matters closely.
“This administration certainly has their eye on the supply chain for all the work they’ve been doing,” said Gold. “They were heavily engaged with multiple different labor negotiations over the past couple of years impacting the supply chain. We would imagine they’d be engaged here to some extent, if not just to help the parties be at the table.”
The ILA has not had a coast-wide strike since 1977.
