The National Retail Federation (NRF) called on President Biden Friday to push for an immediate extension of the current West Coast ports labor contract as a safety net for trade, with negotiations set to run into overtime.
“With the contract set to expire today, we urge the administration to continue to work with the parties to reach a new agreement without any disruption to port operations,” NRF said in its letter to Biden.
The group is calling for an immediate extension of the current contract arguing it would offer shippers reliant on the West Coast ports additional assurances while talks continue.
“We know that there are significant issues for both parties that need to be worked out during the contract negotiation,” NRF said. “The only way to resolve these issues is for the parties to remain at the bargaining table and negotiate in good faith. Extending the current contract would provide additional certainty to all of the supply chain stakeholders that rely on the U.S. West Coast ports. This is even more important as we continue to experience supply chain disruptions and congestion for a variety of reasons.”
More than 150 groups signed Friday’s letter, including the American Apparel & Footwear Association (AAFA), American Cotton Producers, Council of Fashion Designers of America (CFDA) and the Retail Industry Leaders Association (RILA), along with groups representing the logistics, farming, food, home, travel and technology industries among others.
Some lawmakers also underscored the need for continuity in cargo processing as negotiations continue. A letter sent to the heads of the PMA and ILWU on Thursday from several Democrats in Congress, led by California Rep. Linda Sanchez, also urged the two sides “to stay committed” to negotiations.
Companies across industries have been anxiously watching the negotiations, particularly as retailers enter what’s considered the busy season for shipping.
The International Longshore and Warehouse Union (ILWU), representing some 22,000 workers, and the Pacific Maritime Association (PMA), negotiating on behalf of employers, began discussions for a new contract May 10.
Both sides issued a statement last month confirming their commitment to hashing out a deal, but did warn a new agreement would likely not be reached by the July 1 5 p.m. expiration.
The two called the timing “typical” and confirmed there were no plans for a strike or lockout.
U.S. Labor Secretary Martin Walsh told Reuters earlier this week talks are “moving forward.”
“Even with the recent joint statement [between ILWU and PMA], supply chain stakeholders remain concerned about the potential for disruption, especially without a contract or an extension in place,” the NRF letter said. “Unfortunately, this concern stems from a long history of disruptions during previous negotiations.”
Automation is clearly a sticking point between the two groups.
The Economic Roundtable, a Los Angeles-based nonprofit, released a study on the San Pedro Bay ports earlier this week focused on the neighboring ports’ economic impact, worker wages and automation. The study was underwritten by the ILWU.
The study concluded 572 full-time jobs were lost at the Long Beach Container Terminal (LBCT) and Trans Pacific Container Terminal (TraPac), both of which are automated, in 2020 and 2021. The report also concluded automated ports are less productive by 7 percent to 15 percent than non-automated facilities.
The Economic Roundtable’s report made several recommendations, some of which pushed for taxes to offset losses linked to automation, including the suggestion for a fee on automated equipment in the cities of Long Beach and Los Angeles and a state tax on automated terminal equipment.
A study released in May and commissioned by the PMA, just ahead of the start of contract negotiations, offered a different take specific to the LBCT and TraPac terminals. The report, written by University of California at Berkeley professor Michael Nacht and ContainerTrac Inc. founder Larry Henry, found that productivity increased from 350 twenty-foot equivalents (TEUs) on average per acre, to 510 TEUs between January 2020 and February 2022. The two terminals also processed containers two times faster than their non-automated peers, the report said.
Ultimately, the study concluded automation could help the ports of Los Angeles and Long Beach bounce back from supply chain challenges, get back business that was lost to East and Gulf coast ports and create greater efficiencies, according to the report.