U.S. Retailers Nervous About Port Labor Talks

By MarEx 2014-06-27 20:23:00

With peak shipping season approaching, U.S. retailers are anxiously monitoring labor negotiations affecting 20,000 workers at West Coast ports that handle more than 40 percent of goods shipped in ocean containers.

The six-year contract between dockworkers and the employers who operate port terminal and shipping lines expires on July 1 at 5 p.m. PDT (0000 GMT). It covers workers at 29 ports from California to Washington state, including major hubs in Los Angeles/Long Beach and Seattle/Tacoma.

Representatives for the workers and their employers said they expect container cargo to continue moving until an agreement is reached, but retailers and other business that depend on the ports are still haunted by a costly 2002 shutdown.

"Folks are nervous about what's going to happen once the contract expires," Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation (NRF), said on Friday.

During the months of July through September retailers such as Wal-Mart Stores and Target receive ocean shipments of goods sold during their critical back-to-school and holiday shopping seasons, Gold said.

Labor negotiations at West Coast ports typically extend beyond the contract expiration date. This round of talks could stretch into mid-July, said Wade Gates, spokesman for the Pacific Maritime Association (PMA), which represents the port employers.

PMA is "not expecting any" work interruptions, Gates said.

"The negotiators will keep negotiating, the workers will keep working," said Craig Merrilees, spokesman for the International Longshore and Warehouse Union (ILWU), which represents most of the affected workers.

A breakdown in negotiations resulted in a 10-day lockout at West Coast ports in 2002. That stoppage was estimated to have cost the U.S. economy $1 billion a day, said NRF's Gold, and disrupted supply chains for six months.

The National Association of Manufacturers and NRF estimated in a recent report that a 10-day work stoppage at West Coast ports would cost the U.S. economy $2.1 billion per day and result in the loss of 169,000 jobs.

Key issues in the talks include rising healthcare costs and the use of outside contract labor.

Copyright Reuters 2014.