Tentative West Coast port deal reached

San Francisco – A labor dispute that had reduced the 29 West Coast ports which handle close to half the consumer cargo in the U.S. down to 50%-60% capacity appears to be over. Late in the evening of Friday, Feb. 20, the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) reached a tentative agreement on a new five-year contract covering workers at all 29 West Coast ports.



The deal was reached with assistance from U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh. The parties will not be releasing details of the agreement at this time. The agreement is subject to ratification by both parties.



“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry,” said PMA president James McKenna and ILWU resident Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”



Five of the ports — Los Angeles, Long Beach, Oakland, Tacoma and Seattle — are among the top 10 largest and busiest ports (by total TEU volume) in the U.S. The disagreement, which covered wages as well as issues such as mediation of workplace disputes, had been ongoing since May 2014 and included port slowdowns and shutdowns. A four-day port shutdown Feb. 13-16 orchestrated by the PMA, which represents port management, is estimated to have cost the economy $8 billion.



The deal will cover about 20,000 dockworkers at the affected ports. Although ports were scheduled to reopen Saturday, Feb. 21, analysts say it will take some time to fully clear the existing congestion at the ports caused by nine months of delays.



Matthew Shay, president and CEO of the National Retail Federation, released a statement heralding the agreement. The NRF has long been vocally calling for an end to the dispute. The NRF also publicly asked President Obama for direct federal intervention in a November 2014 open letter and during a Feb. 16 televised interview with Jonathan Gold, NRF VP of supply chain. In that interview, Shay said a continuation of the dispute could have led to carriers shifting West Coast port shipments to ports in other parts of the U.S., or even to the Panama Canal.



“We congratulate the ILWU and PMA for finally coming to agreement on a new labor contract,” said Shay. “It is now time for the parties to quickly ratify the deal and immediately focus on clearing out the crisis-level congestion and backlog at the ports. We also thank Secretary Perez and the administration for engaging the parties on this critically important economic and supply chain priority.



“The congestion, slowdowns and suspensions over the last few months have had a significant economic impact on the entire supply chain and those who rely on the West Coast ports to move their goods and products around the world and throughout the country. The agricultural, manufacturing, retailing and transportation industries have all suffered due to the nine-month long contract negotiations.



“As we welcome today’s news, we must dedicate ourselves to finding a new way to ensure that this nightmare scenario is not repeated again. If we are to truly have modern international trade, supply chain and transportation systems, we must develop a better process for contract negotiations moving forward. We must commit whatever resources necessary to ensure that this will not happen again.”