Among growing economic anxiety due to the evolving crisis in Ukraine and mounting challenges to America’s already stressed supply chain, industry leaders from 49 organization sent a letter to the White House on Tuesday morning addressing the upcoming contract negotiations at the nation’s West Coast ports.
In the letter, leaders from the American Apparel & Footwear Association (AAFA), Council of Fashion Designers of America (CFDA), Footwear Distributors and Retailers of America (FDRA), National Retail Federation (NRF), Retail Industry Leaders Association (RILA) and others are asking the Biden administration for “early and persistent” engagement in the impending contract negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).
According to the letter, the U.S. West Coast ports account for over 44% of nationwide container port traffic. 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.
“A timely and satisfactory resolution that advances the needs of both the workers and the ports is imperative to avoiding further backups, delays and higher costs,” the letter stated.
According to Steve Lamar, president and CEO of AAFA, previous labor disputes at the ports were very costly, with the U.S. economy losing between $1 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.
But ultimately, the outcome of these negotiations could effectively determine the future of U.S. supply chain competitiveness. In the letter, industry leaders wrote that to avert an ongoing cycle of congestion and ensure U.S ports are positioned to compete globally, some essential steps are needed, including investment and support for infrastructure modernization and automation, along with addressing systemic operational challenges.
Bottom line: The signed industry leaders are urging the Biden 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.”
This letter comes as the AAFA continues to push Congress to pass the Ocean Shipping Reform Act. The legislation places more oversight of the ocean carriers that are charging unreasonable and unsustainable prices which are being passed on to American businesses and consumers. The bill also requires the Federal Maritime Commission (FMC) to establish and enforce rules to respond to breaches of contracts and address excessive and unjust detention and demurrage fees.