WASHINGTON — The National Retail Federation and Retail Industry Leaders Association are calling on President Obama to help resolve a labor strike at the Ports of Los Angeles and Long Beach which could impact last-minute holiday shipments for retailers, as well as U.S. exports.
This story first appeared in the November 30, 2012 issue of WWD. Subscribe Today.
“A prolonged strike at the nation’s largest ports would have a devastating impact on the U.S. economy,” said Matthew Shay, president and chief executive officer of the NRF, in a letter sent to Obama on Thursday. “We call upon you to use all means necessary to get the two sides back to the negotiating table.”
In a letter also sent Thursday, RILA president Sandy Kennedy stated, “Without a speedy resolution, the harm caused by the shutdown will be widespread, affecting consumers, retailers and the economy at large.”
Warning Obama of the “enormous risk” posed by a shutdown, she asked that “the full weight of the White House” be used to find a resolution.
The Los Angeles-Long Beach ports are the nation’s busiest and handle the largest volume of apparel, textiles and footwear — $40.3 billion in 2011, accounting for 31 percent of the sector’s imports, according to U.S. Customs & Border Protection.
Obama has several options at his disposal. He can urge the two sides to come back to the negotiating table, invite a federal mediation service in, call both parties to the White House to work out a deal or choose the “nuclear option” by invoking the Taft-Hartley Act, said Jonathan Gold, vice president, supply chain and customs policy at the NRF. The law essentially authorizes a federal injunction when a strike threatens national health or safety, and essentially mandates that employees go back to work while negotiators work with a federal mediator to reach a deal.
Shay said the strike raises the specter of the 2002 West Coast port lockout, which lasted 10 days, caused significant supply-chain disruptions and cost the economy an estimated $1 billion a day. It took the ports six months to recover from the backlog.
“An extended strike [in Los Angeles and Long Beach] this time could have a greater impact considering the fragile state of the U.S. economy,” Shay said in the letter. “The two sides must remain at the negotiating table until a deal is reached.”
The strike began on Tuesday after 67 workers from the International Longshore and Warehouse Union Local 63’s Office Clerical Unit walked out of negotiations and brought all activity to a standstill at the APM Terminal at the Port of Los Angeles. The rest of the 800-member clerical unit walked out on Wednesday, despite an order from a local arbitrator to return to work after the picket lines were declared invalid.
The ILWU’s 63-OCU division has been in negotiations with the Los Angeles/Long Beach Harbor Employers Association since June of 2010, when its last contract expired. The OCU claims shipping agencies and terminal operators, represented by the Harbor Employers Association, are trying to outsource their jobs to nonunion workers, a charge the Harbor Employers Association denies.
John Fageaux, president of 63-OCU, said that the harbor community has lost 51 percent of its permanent positions over the past five years, and that employers have announced plans to eliminate another 76 jobs in the future.
Employers argue they have not sent one job overseas and have offered an absolute guarantee that no OCU workers will be laid off. They also argue they have provided a guarantee of full-time pay for 52 weeks per year, regardless of whether there is work; grievance procedures that protect against diversion of OCU work with monetary penalties assessed if a nonunion worker performs the work, and access to the OCU computer databases to monitor the work.