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NRF: Retailers Ponder Port Contingency Plans

June 9, 2014  by in Industry, Sourcing / Importing   

In a report on the NRF Web site Gold said an amicable resolution of issues facing West Coast port dockworkers and management is hopeful "but not likely" before the current contract expires June 30.

"While most parties believe that talks between the International Longshore & Warehouse Union, which represents the dockworkers, and Pacific Management Association, which represents the terminal operators, will likely extend beyond the deadline, the big question facing farmers, manufacturers, retailers and others is whether or not we will see a supply chain disruption," Gold said. "Will there be a repeat of 2002, which resulted in a 10-day lockout of the ports, or will we see a repeat of 2008, where the parties worked through the contract?"

"Throughout this process, NRF has urged both parties to negotiate a new contract without engaging in any supply chain disruptions."

He said the good news is that the parties have already started talking and continue to remain at the negotiating table. There will be a media blackout from both sides throughout the negotiations.

"As the talks continue, retailers and others will continue putting contingency plans into place to ensure their cargo is not interrupted by potential disruptions at West Coast ports," Gold wrote. "Shippers learned a hard lesson from the 2002 lockout and the most recent action at East and Gulf Coast ports. Contingency plans come at a cost, though. Shipping early, diverting cargo to alternate ports, utilizing air transportation or storing products at warehouses all come at a cost, and higher costs for shippers and retailers equates to potentially higher costs for consumers."  

While NRF does not anticipate a repeat of the 2002 port fiasco, Gold said "it is important for retailers, shippers and other port stakeholders to be ready and prepared for any possibility."