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Strike May Have Detrimental Effects on Florida Supply Chain

Strike May Have Detrimental Effects on Florida Supply Chain

Strike May Have Detrimental Effects on Florida Supply Chain
Image via Flickr by jdnx

The clock is ticking on negotiations that could shut down 15 US ports, an outcome that will have a serious impact on Florida’s economy as well as the nation’s. The contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) will expire on December 29. If a suitable agreement isn’t met before then, the ILA plans to strike.

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Why a Strike Must Be Avoided

“A strike of any kind at ports along the East and Gulf Coast could prove devastating for the U.S. economy,” said Matthew Shay, president and CEO of the National Retail Federation, in a letter to President Obama earlier this month. The proposed work stoppage would impact Port Everglades, affecting US imports and South Florida’s tourism industry, but the strike would also disrupt the supply chain at 14 other ports along the east coast. Retailers like Wal-Mart, Target and Home Depot would feel the effects, while ILA members stand to lose $5 million a day in wages and benefits.

Container Royalty Fund Is the Concern

The Container Royalty Fund began in the 60s when containers and automated cargo became commonplace. ILA members faced lost wages due to these shipping changes, but the Container Royalty Fund solved the problem. USMX plans to cap the monies received from container shipments and hopes to end the fund altogether in the near future. Container royalties not only ensure fair wages for ILA employees, it also funds a significant part of their healthcare program.

Negotiations Underway

According to a December 24 press release, “FMCS Director George Cohen has called a meeting of the ILA and the Maritime Alliance in advance of the December 29th expiration of the contract extension. The parties have agreed to attend. Due to the sensitive nature of the negotiations FMCS will have no additional comment at this time.” Florida governor Rick Scott is also stepping in to prevent a strike and has asked Obama to enforce the Taft-Hartley Act in case an agreement is not made before the approaching deadline.

All parties involved understand the impact this could have on US trade and commerce. Because of the widespread implications, the Federal Mediation and Conciliation Service (FMCS) will work closely with everyone to bring about an agreeable resolution. [/show_to]

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