US: Retailers mull contingency plans amid port talks
Negotiations between dockworkers and port operators are continuing behind closed-doors as both parties work to agree a new labour contract covering west coast ports.
The Pacific Maritime Association (PMA) and International Longshore & Warehouse Union (ILWU) have been engaged in talks since 12 May. They are trying to reach agreement on a new coast-wide contract to replace the current six-year contract, which expires on 30 June, and covers nearly 20,000 dockworkers at 29 west coast ports.
Separately, the Federal Maritime Commission (FMC) released guidance that suggests port congestion surcharges may be implemented in the case of cargo delays.
The hope, of course, is that a new deal will be done with minimal disruption, but retailers, brands and importers are obviously contemplating contingency plans as negotiations continue.
West Coast ports handle more than two-thirds of US retail container cargo, including the bulk of cargo from Asia. The last major coast-wide shutdown there occurred in autumn 2002, closing ports for 10 days and creating a month-long backlog to be cleared.
"While we do not think there will be a repeat of the 2002 port fiasco, it is important for retailers, shippers and other port stakeholders to be ready and prepared for any possibility," notes Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF).
The NRF last week said import volume at major US container ports is expected to increase 7.5% in June as retailers bring unusually high quantities of merchandise into the country early to avoid any potential disruptions - especially for the key back-to-school and holiday seasons.
Contingency plans include shipping early, diverting cargo to alternate ports, using air transportation or storing products at warehouses - but all come at a cost.
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