About 120 picketing truck drivers at the ports of Los Angeles and Long Beach, Calif. are adding to retailers’ concerns about contract agreements between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA).
Contract talks between ILWU’s 20,000 members and PMA expired on July 1, however, employees have continued to work without a contract. According to Forbes, the old contract prohibited longshore employees from striking in support of the truck drivers, which claim they are erroneously classified as independent contractors. Without a contract, longshoremen are free to join the picket lines.
Approximately $435 billion worth of annual trade is at risk if the ports are shut down in a strike, Forbes reported. Thousands of companies’ holiday deliveries, including Costco, Target and Walmart, could be impacted. As a result, retailers are bringing in record levels of product into the country now to prevent a holiday shopping disaster later.
According to the monthly Global Port Tracker released by the National Retailer Federation (NRF) and Hackett Associates, a maritime research and consulting company, import volume at major U.S. container ports was projected to total 1.5 million containers in July, the highest monthly volume in the last five years.
NRF vice president for supply chain and customs policy Jonathan Gold, said, “We’re still hoping to get through this without any significant disruptions but retailers aren’t taking any chances.” He added, “Retailers have been bringing merchandise in early for months now and will do what it takes to make sure shelves are stocked for their customers regardless of what happens during the negotiations.”
Negations between ILWU and PMA resumed Monday after a 10-day hiatus. Benefits are reportedly the biggest point of contention. The two sides are also in discussion over a tax that could cost up to $150 million, set to take effect in 2018 under the Affordable Care Act on certain plans, which the union’s coverage qualifies for.