October 9, 2014 Mr. Robert McEllrath President International Longshore and Warehouse Union 1188 Franklin Street, 4th Floor San Francisco, CA 94109 Mr. James McKenna Chairman and CEO Pacific Maritime Association 555 Market Street, Third Floor San Francisco, CA 94105 Dear Mr. McEllrath and Mr. McKenna: The members of the National Retail Federation (NRF), and the millions of workers we employ and customers we serve, have a key interest in seeing the negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) reach a successful and speedy conclusion. We commend the PMA and the ILWU for staying at the table and continuing to negotiate a new agreement, but the failure to reach an agreement is now having a significant impact on port operations and contributing to port congestion in significant and damaging ways. We urge the parties to quickly come to a conclusion on a new labor agreement as a means to resolve the ongoing congestion issues impacting the West Coast ports. At a minimum, we ask that the parties extend the expired contract through November in order to reinstate arbitration agreements, which are preventing many issues at the ports from being addressed. Retailers are now in the midst of their heaviest shipping season of the year preparing for the upcoming holidays, which are a ‘make it or break it’ time for retailers and merchants. While we recognize that there are many reasons for the current port congestion, there is no doubt that the lack of a new labor contract between PMA and the ILWU is having a big impact on port productivity, particularly in Southern California. As you know retailers began instituting costly contingency plans in early 2014 to ensure that merchandise would reach stores in time for the critical holiday shopping season. The current congestion at West Coast ports has eviscerated those preparations in many cases which may cause critical merchandise to miss target on-sale dates. Finalizing a new labor contract is an absolutely critical component to working through the backlog of shipping containers now piling up at West Coast ports. We are deeply troubled by the fact that no apparent progress has been made in the negotiations since August, when the PMA and ILWU announced a “tentative deal” on health benefits. Whether intentional or not, the fact that neither the PMA nor ILWU has made any public progress report in more than a month is sending a very troublesome and disconcerting signal. National Retail Federation Page Two Shippers look for certainty when making strategic long-term supply chain investments, or for placing transportation orders for discretionary cargo. The ongoing negotiations and the degradation of operating efficiency, specifically at the Ports of Los Angeles and Long Beach, is making the region unattractive for future investment and will lead to a permanent shift of cargo. NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. We strongly urge both of your organizations to quickly resolve the remaining issues under negotiation in order to arrive at a new contract as soon as possible. These negotiations are critically important to the retail industry and the broader economy, and must be resolved quickly and amicably. If you have any questions, please contact Jonathan Gold, NRF’s Vice President, Supply Chain and Customs Policy at (202) 626-8193. Thank you for your consideration. Sincerely, Matt Shay President and CEO CC: The Honorable Eric Garcetti, Mayor of Los Angeles The Honorable Robert Garcia, Mayor of Long Beach Mr. Gene Seroka, Executive Director, Port of Los Angeles Mr. Jon Slangerup, Chief Executive, Port of Long Beach