Negotiations between the International Longshoremen’s Association (ILA) and employers represented by the US Marine Alliance broke off last week after management said they wanted to cap container royalties – payments made to longshoremen based on the weight of the container cargo.
According to a report in the Global Post, no new talks are scheduled, raising the possibility that 14,500 workers at 15 ports across the Eastern Seaboard could go on strike on December 30th.
“We understand the impact of a strike and we know the implications but the ILA is obligated to represent their members and they work under extremely dangerous circumstances,” said James McNamara, spokesman for the ILA.
The possible disruption in the supply chain is being called a “container cliff” by the National Retail Federation, which is warning that the strike is not only costly for its members but could also have a longer-lasting effect on the supply chain.
Analysts told Global Post that New York and New Jersey ports alone handle 10% of imports from China, 69% of imports from Israel and 37% of imports from Italy, demonstrating the impact on US corporates’ global sourcing strategies, should this flow of goods and materials be disrupted.
Millions of containers are estimated to be impacted should the strike take place, leaving retailers from Wal-Mart through to SMEs vulnerable to the effects.
The National Association of Manufacturers, (NAM) meanwhile, has said the strike would be a “devastating blow” to the manufacturing supply chains. Jay Timmons, president of the NAM has said his members are urging both sides to come to a resolution, or failing that, for President Obama to step in.
“Our economy is fragile and a port strike would simply put the manufacturing supply chains and exports a trisk driving down further our economic situation,” he said.
