ILA-management standoff sparks fear of retail supply chain disruption

THE early breakdown in negotiations, and subsequent strike vote in New York - between the International Longshoremen Association (ILA) and the United States Maritime Alliance (USMX) has sparked fears among retailers of massive supply chain disruptions ahead of peak shipping season.

The ILA's demands for job guarantees on every job taken by automation at ports of US east and Gulf coasts for dockers from Maine to Texas ended in an impasse rather than a final deal before contract deadline expires September 30.

For retailers using the east and Gulf coast ports, the decision comes down to deciding to alter transport routes to meet Christmas in-store deadlines, said National Retail Federation (NRF).

"Failure to reach agreement will lead to supply chain disruptions which could seriously harm the US economy," said NRF president Matthew Shay, reported American Shipper.

Contingency plans for shippers need to be made within a few days to account for west coast timings. This would undoubtedly stress capacity for intermodal transit on truck or rail from west to east coast, which would also clog warehouse space, which is now set up for local and regional distribution.

Air freight may be the final option if talks do not resume in time despite expense but 3PLs and liner companies "give alternatives" only rather than direct advice, according to one spokesman.

The ILA president Harold Daggett has been accused by USMX chief executive officer James Capo as lacking commitment in bargaining ahead of wage negotiations. Now, Mr Daggett could be accused of creating bad feeling with the Democratic Party ahead of US elections if a strike goes ahead.

The response from President Obama could be to declare a national economic emergency as President Bush did following a lock out from the ILWU on the west coast a decade ago.