The five-year deal between International Longshore and Warehouse Union and Pacific Maritime Association must be approved by the 13,000-member union’s rank-and-file.
LOS ANGELES — Negotiators reached a tentative contract covering West Coast dockworkers on Friday evening, likely ending a protracted labor dispute that snarled international trade at seaports handling about $1 trillion worth of cargo annually.
U.S. Secretary of Labor Thomas Perez, called to the scene last weekend by President Obama, said that both the dockworkers’ union and their employers agreed to resume work Saturday evening.
The breakthrough came after nine months of negotiations that turned contentious in the fall, when dockworkers and their employers began blaming each other for problems getting imports to consumers and exports overseas.
The five-year deal must be approved by the 13,000-member International Longshore and Warehouse Union’s rank-and-file. They work 29 ports from San Diego to Seattle that handle about one-quarter of all U.S. international trade, much of it with Asia.
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Negotiators for the union and the Pacific Maritime Association, which represents oceangoing shipping lines and the companies that load and unload cargo at port terminals, began talking formally in May. Their prior six-year contract expired July 1.
“We are pleased to have reached an agreement that is good for workers and for the industry,” said maritime association President James McKenna and union President Bob McEllrath in a joint written statement. “We are also pleased that our ports can now resume full operations.”
“After more than six months and the loss of hundreds of millions of dollars, we have finally reached the beginning of the end of this long nightmare for Washington’s trade economy,” said Eric Schinfeld, president of the Washington Council on International Trade. “There are many months to go before we are back to full capacity and some customers may never return, but we should celebrate this moment nonetheless.”
National Retail Federation President Matthew Shay congratulated the parties involved, and said, “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.”
After initial signs of progress, in the fall employers publicly charged dockworkers with creating a congestion crisis to gain bargaining leverage by slowing their work rate and withholding the most skilled workers. The union responded that its members were working safely and blamed the jam on broader dysfunction at West Coast ports that predated contract talks, notably a lack of truck beds to tow containers from dockside yards to distribution warehouses.
In early February, the CEO of the maritime association publicly warned that if no agreement could be reached, employers would stop calling workers and shut down the ports within days. Weekend and holiday lockouts of many longshore workers followed, though major ports were not fully closed.
Instead, cargo trickled through. Massive oceangoing ships anchored off the coast of Los Angeles and near the ports of Oakland and Seattle — waiting for berths they anticipated occupying after the long haul across the Pacific that instead were taken by ships whose unloading was itself far behind schedule. By mid-February, about 15 were anchored in Puget Sound, with about 30 ships clustered outside the Los Angeles and Long Beach harbors. The scenes were reminiscent of a 2002 worker lockout that shuttered West Coast ports for 10 days.
Groups representing retailers warned that some holiday goods might be delayed; thanks to advanced planning, trouble on the waterfront didn’t steal Christmas.
Still, there were broader economic repercussions.
Farm exports suffered — McDonald’s in Japan, for example, began rationing fries because of a potato shortage. Apple, walnut and hay producers all said they were losing out to foreign competitors. The meat industry tallied its losses in the tens of millions of dollars. Importers of furniture, books, clothing — even Mardi Gras beads — said their products were stuck on the docks. Wal-Mart Stores warned that Easter goodies could be affected.
“If Asian markets are made to feel that Washington is not a reliable supplier, then they may stick with other suppliers in the future,” said Jon DeVaney, president of the Washington State Tree Fruit Association. “Regaining lost market share can take years.”
DeVaney said he has seen reports that the apple industry has lost $70 million in sales since early November when the congestion at the ports increased.
“A lot of customers could not get the volumes they wanted or in the time frame they wanted, so they went with other suppliers,” he said.
It is the same situation for potatoes. For November and December, the Washington State Potato Commission estimates $34 million in lost sales — due mainly to frozen French fries.
“Fresh potatoes are sitting on the docks rotting and we’re expecting millions of dollars lost for those items,” Assistant Executive Director Matt Harris said in an email.
Tacoma Transloadhas 30 railcars of wheat and seeds in Tacoma waiting to be shipped to Asia. The railcars, each holding between $20,000 and $60,000 worth of product, need to be transloaded into 120 containers and shipped, but until that can happen, the company is being charged $150 per day per railcar.
“The profit went out the window at about week one,” manager Gary Hoffman said Thursday. “Now the shippers don’t want to ship anymore product here because they don’t know what their cost is going to be.”
“They may not come back,” he said.