Manufacturers welcomed the news this morning that the U.S. Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) have agreed to a 30-day extension to resolve their differences to avoid a dockworkers strike of the East and Gulf Coast ports.
However, it is critical that both parties use this time wisely to reach an agreement as soon as possible to avoid a strike at the end of the 30-day extension. Manufacturers implemented costly contingency plans this month, and the last thing manufacturers need is a repeat of the same scenario in January. Even with this progress outlined today, uncertainty remains until a final agreement is reached. Due to the complex nature of manufacturing supply chains, manufacturers must plan far ahead, and the continued potential for a strike in 30 days will result in additional costs to minimize the impacts of any port disruptions.
According to the Federal Mediation and Conciliation Service, both parties have agreed in principle to resolve the royalty payment issue, and the 30-day extension will give them time to work out other differences. This is a positive development to help avoid a port strike at the worst possible time for manufacturers.
With manufacturers already facing the fiscal cliff in three days, a port strike would have been another crippling blow to our economy. A strike would likely cost our economy an estimated $1 billion a day. Supply chains would be disrupted, putting manufacturing jobs at risk and halting exports. The National Association of Manufacturers has urged both sides to come to an agreement to protect jobs. We are hopeful that a final agreement will be reached as soon as possible so we can put any additional uncertainty from a port strike to rest.
Robyn Boerstling is director of transportation and infrastructure policy, National Association of Manufacturers.
Recent News Coverage:
–“Ports on East Coast threatened by strike“ (USA Today)
– “Obama pressed to act as dockworker unions threan massive port strike” (The Hill)
– “Looming port strike could cost economy billions” (CNN Money)