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ONE Labor Contract Dispute Is Crippling Small Businesses

Retailers have become increasingly alarmed as the West Coast port dispute becomes more hostile.

For the past eight months, the Pacific Maritime Association and the International Longshore and Warehouse Union have struggled to agree on a new labor contract. Even as negotiations resumed Friday after a short break, the inability to come to a deal and the resulting port congestion has prompted vast economic concern, especially among those in the retail industry.

Stephen Schatz, the senior director of media relations for the National Retail Federation, notes that though retailers have been doing all they can to keep their stores and warehouses stocked, they grow increasingly concerned over the long-term economic impact the dispute may have.

“The National Retail Federation has been keeping a close eye on this dispute,” Schatz told The Daily Caller News Foundation. “Over the past two to three months we have seen increasing concern from stakeholders.”

Schatz said retailers and businesses involved in the supply chain have done all they can to work around the dispute, including using ports outside the country to get their supplies.

“We’ve talked to our members and they say they’ll go to Canadian ports or Mexican ports,” Schatz said. “It’s critically import for retailers to have stock.”

Along with using foreign ports to get products into the United States, Schatz notes that some companies have even flown products into the country — which cost significantly more to do.

It’s not just companies reliant on imports that are concerned, companies that export good to foreign countries have suffered greatly because of the slowdowns and port congestion. Schatz notes that small companies that export goods are likely the hardest hit.

“In the long term it’s really putting our exports in jeopardy,” Schatz continued. Many small businesses don’t have the resources and ability to divert products to ports in Canada and Mexico like the bigger companies can. Additionally they are much more reliant on foreign companies who will likely look elsewhere for products if they cannot get them easily from the United States.

The slowdowns and port congestion hurt one Washington-based Christmas tree grower so badly that Schatz fears, “that tree farm may have to go out of business,” because they were unable to be exported to Japan in time for the holidays.

Retailers have grown so concerned they have sent several letters to the PMA and ILWU along with lawmakers in the hopes of resolving the conflict. In the most recent letter from last week, dozens of manufacturers, farmers, wholesalers, retailers, importers, exporters and distributors wrote to express their concern over the rhetoric and growing hostility they have seen from both sides throughout the negotiation process.

“As customers of your ports, and industries affected by their operations, our members desperately need this negotiation to be concluded and operations returned to normal levels of through-put,” the letter noted.

“Over the summer months, both sides verbally agreed to work during the negotiations without interruptions,” the letter continued. “That promise was broken and the consequences have been to the detriment of our collective industries, the economy and our global competitiveness.”

“The stakes are extremely high and the uncertainty at the West Coast ports is causing great reputational and economic harm to our nation,” the letter declared. “The competitive marketplace will respond if you continue on this current path.”

As the letter points out, foreign competitors are already using the slowdowns and the resulting uncertainty as a reason not to buy American made or grown products. Additionally, retailers are already seeing delays stretching far into spring.

While the PMA has accused the union of purposely causing the port slowdowns to pressure it at the bargaining table, ILWU defended itself by noting much of the congestion was happening before the current negotiations.

The PMA argued in a statement provided to TheDCNF, “Despite ILWU rhetoric, there was no significant congestion in Tacoma, Seattle or Oakland prior to their slowdowns, which began on Halloween night in Tacoma and at other major ports the following week.”

“In Southern California, the ILWU’s targeted slowdowns have severely worsened existing congestion by withholding the skilled workers who are most essential to clearing crowded terminals,” PMA continued. “All the while, cargo sits idle, the economic damage to our communities worsens and the reputation of West Coast ports is harmed.”

Though Schatz is optimistic that the two sides are meeting and have both agreed on federal mediation, he still is very much concerned that these port slowdowns may result in a full-scale shutdown.

“If the 29 west coast ports were to shutdown, the consequences would be severe,” Schatz warns. “The longer it is shutdown, the bigger the economic impact.”

“A shutdown is totally unacceptable and the delays are also unacceptable,” Schatz added.

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