The threat of strikes by the International Longshoremen’s Association looked set to lead to the closure of key US ports in the run up to the busiest retail period in the year.
While a tentative agreement over royalty payments for workers has been reached, the dispute over contracts is yet to be settled, with the deadline having been put off to February 6th.
While the extension averts a strik that would have halted the flow of goods through ports responsible for about 45% of US commerce, it didn’t guarantee supply-chain stability.
“Only until we have a final contract will retailers and others have the certainty they need,” Matthew Shay, president of the National Retail Federation in a statement yesterday. “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.”
Contract negoaitations had broken down with the alliance seeking to cap royalty payouts it says totalled $211m last year, or an average of $10 per hour, while the Longshoremen called the fees “untouchable”.
After reaching the tentative agreement on container royalties, used to supplement wages, the next step is for dockworkers and their emplyoers to reach a binding contract that includes the deal, according to a report in Bloomberg.
Both sides have signalled their unwillingness to yield on royalty fee demands, which may spell trouble for the deadline in six weeks time. Retailers, meanwhile, have been making contingency plans in the event of a strike.
