The U.S. National Retail Federation (NRF) has urged the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) to reach conclusion on the new labor agreement, saying that the failure to reach an agreement is starting to have a significant and damaging impact on port operations and is contributing to congestion at the West Coast ports.
In a letter sent to the PMA and the ILWU, Matt Shay, President and CEO of the NRF said that ”at a minimum, we ask that the parties extend the expired contract through November in order to reinstate arbitration agreements, which are preventing many issues at the ports from being addressed.”
Shay said that although reasons for the current port congestion are many, ”the lack of a new labor contract between PMA and the ILWU is having a big impact on port productivity, particularly in Southern California.”
The U.S. retailers are currently going through ”the heaviest shipping season of the year,” preparing for the coming holidays, which is a ”make it or break it” time for retailers and merchants.
”Finalizing a new labor contract is an absolutely critical component to working through the backlog of shipping containers now piling up at West Coast ports.
We are deeply troubled by the fact that no apparent progress has been made in the negotiations since August, when the PMA and ILWU announced a “tentative deal” on health benefits.
Whether intentional or not, the fact that neither the PMA nor ILWU has made any public progress report in more than a month is sending a very troublesome and disconcerting signal,” said Shay in the letter.
He went on to say that shippers want certainty when making long-term supply chain investments, and that the prolonged negotiations are making the region unattractive for future investment.