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Monday - July 22, 2019 
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The National Impact of a West Coast Port Stoppage

The National Impact of a West Coast Port Stoppage

by Matt Shay, President & CEO, National Retail Federation

Reverse Logistics Magazine, Edition 72

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(Interview conducted by CNBC Squawk Box)

NRF President and CEO Matthew Shay discussed the “economic fallout from a West Coast port slowdown” on CNBC Squawk Box.

Steve: We will find out how the slowdown of the port is impacting the retail industry. Matt Shay of the National Retail Federation. Have we started to see this issue show up on the shelves of retailers in the United States?

Matt Shay: What we’ve seen is that the slowdown has had a serious impact. It continues to negatively and significantly affect operations of retailers and many other industries in the U.S. and this goes back many months. We’ve talked with you on a couple of occasions. This is being observed, negotiations have been going on for 9 months, contract expired 6 months ago and in context here, this is 29 ports from San Diego, CA all the way to Bellingham, WA. 42% of all containerized freight, 12% of GDP, 18 million jobs, and it’s starting to have an effect. As the port operators are saying it’s close to catastrophic. The last time they said that there was a shutdown for 10 days in 2002 that cost the economy a billion a day. Our study estimates today that it would be 2.5 billion per day.

Steve: Give me an example, physically what is happening to retailers with this port slowdown?

Matt Shay: Obviously there are an enormous number of containers that are not getting offloaded, so those products are not making it to shelves. We know there are 25 container ships sitting offshore in Los Angeles, 15 offshore in Oakland and they just can’t get here. There are inventory delays, making it much harder to get the product and to turn that inventory. This goes for everyone, not just us. Agricultural products are rotting and can’t get exported, manufacturing goods both coming in and out of this country, it’s starting to add up. We’re all trying to help the middle class here but they’re going to be the ones that feel it the most in the higher prices.

Steve: Are you talking to the White House about this, urging federal government involvement?

Matt Shay: We have been since before the holidays, we have been for many months.

Steve: What is the white house telling you?

Matt Shay: You heard Secretary Liu tell you that they are looking at this and monitoring the situation closely. We certainly don’t want to take a position on the negotiating issues between the two parties. We encourage them to continue with the existing contract, state the table, and keep normal operations in place; avoid the slowdown. When you have 25 ships just sitting offshore outside Long Beach and LA, and 15 offshore in San Francisco. This is the kind of thing that usually takes a few days to offload a container. Now it takes weeks. And you heard a couple of examples of the inability to get the right kinds of skilled workers to operate those cranes, this is a real serious issue and is a significant part of the economy. 95% of the personal protective equipment used in medical institutions, such as gloves and masks gets made outside of the US and it can’t get here. We’ve got commissaries on military bases where military families in Europe and Asia can’t buy fresh produce, can’t get meat, pork and poultry so this has got a real serious affect in many industries and we certainly feel it very acutely.
Matt Shay joined NRF in 2010. Shay began his career at the Ohio Council of Retail Merchants after receiving his undergraduate degree from Wittenberg University and his law degree from Ohio State University. He joined the IFA in 1993 and served in several positions of increasing responsibility including Vice President and Director of Government Relations, Senior Vice President and Chief Counsel, and Executive Vice President and COO. He was named IFA President in 2004 and added the title of CEO in 2007. He has the leadership skills, energy and enthusiasm necessary to guide this organization confidently into the future.
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