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Industry Calls on White House to Take Role in Port Negotiations

Retail and fashion industry leaders representing 49 associations sent a letter to the White House Tuesday urging the administration to enact “early and persistent” engagement in the impending contract negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU). Those groups represent the management and labor involved in running the West Coast ports. The current contract between the two is set to expire in July.

The industry leaders noted that they sent this letter against the backdrop of significant global economic anxiety due to the evolving crisis in Ukraine and mounting challenges to America’s already stressed supply chain. They noted that the U.S. West Coast ports, including the largest container cargo complex of Los Angeles-Long Beach, account for more than 44 percent of nationwide container port traffic.

The letter noted that last year the White House brought labor leaders and business together to discuss the supply chain crisis and to find solutions to alleviate the effects of the current historic disruption impacting this country.

“We welcomed the dialogue and the establishment of the new Supply Chain Disruptions Task Force to provide a whole-of-government response to address near-term supply chain challenges to the economic recovery, along with the appointment of John Porcari as the port envoy,” the associations said. “However, the looming contract negotiations on the West Coast could undermine these efforts, at a time when the nation can ill afford a step backward.”

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With negotiations yet to formally begin ahead of the contract’s July 1 expiration, uncertainty is already disrupting freight strategies and operations on the ground, the coalition said. Importers and exporters wary of further disruption are already adjusting plans to avoid or mitigate potential impacts to keep goods moving as they have throughout the pandemic. These adjustments are influencing volumes and market share, with the contract expiration just months away, they said.

“Pandemic-related disruptions in the nation’s supply chain have been costly and inconvenient,” said Brian Dodge, president of the Retail Industry Leaders Association. “Allowing a work slowdown or a shutdown to impact operations would amount to a self-inflicted wound, compounding congestion and leading to even higher costs on everyday products for consumers.”

Steve Lamar, president and CEO of the American Apparel & Footwear Association, said previous labor disputes at the ports cost the U.S. economy upward of $1 billion to $2 billion per day.

“To say the stakes are even higher today is an extreme understatement, as even a short slowdown or shutdown will disrupt already fragile supply chains and compound inflationary pressure,” Lamar said.

The industry leaders are urging the Biden-Harris administration to encourage and, if necessary, convene the parties to facilitate negotiations.

“These efforts will benefit American importers and exporters, the tens of millions of workers they employ and the hundreds of millions of consumers they serve,” the letter stated. “Swift action and consistent attention to this matter can safeguard our shared economic gains and protect the progress your administration has made in addressing supply chain disruption and port congestion.”