Marine terminal operators and longshoremen extended contract talks for another 30 days, avoiding a Dec. 29 strike that would have shut down operations at 14 container ports from Boston to Houston.
The ILA was due to stop work at the sea ports at midnight Dec. 29 if no agreement was reached, in what would have been the first significant East Coast port strike since 1977.
Federal Mediator George Cohen said the two sides agreed to extend talks after coming to terms on how much the U.S. Maritime Alliance (USMX) would pay the International Longshoremens Association for every container moved at the ports. Such royalty payments reached $211 million in 2011, according to USMX. The payments were negotiated in the 1960s to compensate ILA workers in New York area ports for the loss of jobs caused by containerization, but are now being made to ILA workers at all 14 USMX ports.
At the National Retail Federation, President and CEO Matthew Shay expressed relief, but said the uncertainty around the talks continues to hamstring retailers and their vendors. The American Apparel & Footwear Association estimates 98 percent of the nations apparel and 99 percent of its footwear are imported.
Following the devastation of Hurricane Sandy and the recent eight-day port strike in Los Angeles and Long Beach, this extension is a welcomed sign to the entire supply chain community-from manufacturers to retailers-that the two sides understand the risks of a shutdown and are listening to the concerns of the shipping community, Shay said. Only until we have a final contract will retailers and others have the certainty they need.
