Time in a bottle
Michael J. Knell -- Furniture Today, October 7, 2002
It is impossible to imagine that George W. Bush won't step in to halt the dispute that has bottled up cargo ships at ports from San Diego to Bellingham — if he hasn't already done so by the time this issue hits the mailbox.
Consumer spending has been propping up the economy for quite a while now, and the administration can ill afford to stand by as the consumer products' and retail industry's supply lines unravel. Not to mention the loss to business, which has been put at about $1 billion a day. The Taft-Hartley Act allows Presidents to order an 80-day cooling off period under such circumstances — which would give retailers and suppliers adequate time to readjust their shipping arrangements for spring merchandise.
The question is how much longer the West Coast lockout can go on without seriously undermining holiday 2003. The spokeswoman for a retail coalition urging the President to call a halt to the fracas said just three days into the lockout that even if the impasse were to end immediately, it would take more than a month to right the international supply chain.
Tough as that will be for importers of holiday linens and Christmas tree skirts, it's really going to be trouble for importers of toys and kitchen electrics and consumer electronics.
Suppliers that have the ability to fall back on their own U.S. manufacturing operations (and rumor has it there actually are a few left in the country) are not insulated from the dilemma. It's not only product that's been held up on the West Coast — it's packaging, too. There are a whole lot of vinyl zip bags bobbing idly on the water, not to mention raw materials for U.S. manufacture.
Suddenly, anyone with an operation or affiliation in Mexico is looking like a smart cookie. And it wouldn't be surprising if the lockout episode doesn't provide a long-term boost to Mexican manufacturing operations.
On a broader scale, the dispute between the Pacific Maritime Association, which controls the ports, and the International Longshore and Warehouse Union, which has balked at any technological upgrades that might cost it jobs, gives the industry just a taste of how quickly things can go wrong when supply lines are stretched halfway around the globe.
And let's thank our lucky stars that this is a dock dispute taking place in the United States, not in a developing nation of the sort that might send in military troops to quell the problem. It's one thing to see your goods stuck on the dock. It's quite another to have them blown up along with the dock.
This is a good moment for suppliers and customers to sit down together and discuss just how much vulnerability they can stand to have built into their supply lines — and at what cost.
Add that to the agenda for Market.
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