US: East and Gulf Coast port strike averted as negotiations continue
A strike at ports along the US' East and Gulf coasts has been temporarily averted, as the International Longshoremen Association (ILA) and United States Maritime Alliance (USMX) have extended their current contract for a further 30 days as they continue negotiations.
The Federal Mediation and Conciliation Service said on 28 December that an issue surrounding royalties for each container unloaded has been agreed upon in principle by the two parties, if they can reach an overall collective bargaining agreement.
The ILA and USMX will work to negotiate all remaining outstanding Master Agreement issues by midnight on 28 January. The contract was set to end on 29 December.
Clothing and retail industry bodies have welcomed the extension, but continued to emphasise the importance of a deal being reached as soon as possible.
The CEO of the American Apparel and Footwear Association (AAFA), Kevin Burke said: "The clock now begins for the negotiators to return to the table and work toward a long-term solution to restore greater predictability and certainty to the business decisions the US apparel and footwear industry makes every day."
Meanwhile, National Retail Federation (NRF) CEO Matthew Shay said the decision was a "much better" result than an East and Gulf Coast port strike that would have shut down 14 container ports from Maine to Texas.
"A coast-wide port shutdown is not an option. It would have severe economic ramifications for the local, national and even global economies and wreak havoc on the supply chain," said Shay.
"Throughout the process, NRF has stressed the vital economic importance of keeping the ports open to international trade and commerce. Our ports and the cargo and containers that flow through them are truly our economic lifelines to the world."
Shay added that in the wake of the devestation of Hurricane Sandy and the recent eight-day port strike in Los Angeles and Long Beach, the extension is a "welcomed sign to the entire supply chain community - from manufacturers to retailers - that the two sides understand the risks of a shut down and are listening to the concerns of the shipping community".
"We applaud the work of the Federal Mediation and Conciliation Service for working tirelessly - even through the holiday week - to orchestrate this contract extension and encourage them to continue their work with both parties to help them arrive at a final master contract. Only until we have a final contract will retailers and others have the certainty they need," he said.
According to AAFA statistics, 98% of apparel and 99% of footwear sold in the US is produced internationally.
Earlier in December, the NRF warned of "devastating implications" for the retail industry if the talks between the two parties break down. It said shipments of spring and summer merchandise, such as shoes and swimwear could be affected.
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