A tentative five-year contract settlement has been reached by West Coast dockworkers and their employers, preventing a shutdown of 29 ports that could have cost the US economy $2 billion per day, according to US Labor Secretary Tom Perez.
“This is now in the rear-view mirror. A significant potential headwind for this economic recovery has been removed,” Perez said outside the San Francisco headquarters of the Pacific Maritime Association, which had been in a nine-month contract battle with the International Longshore and Warehouse Union.
Perez helped arrange a compromise on whether the union could fire arbitrators in workplace disputes, which had prevented a contract settlement after the sides agreed on other terms. Instead of a single arbitrator, a panel now will hear grievances, union president Robert McEllrath said.
The labor standoff had cut productivity at West Coast ports by as much as half since November. California citrus fruit headed for Asia sat spoiling on the docks, while McDonald’s restaurants in Japan had to ration french fries because of a shortage of Idaho potatoes.
The Port of Los Angeles, the nation’s busiest, handled 29% less cargo in January 2015 than in January 2014, and volumes were down 19% in nearby Long Beach, the nation’s second-busiest port, according to statements from both ports.
Even after port operations return to normal, the cargo backlog remains severe, Perez said.
Talks had collapsed over a union demand that it be able to fire arbitrators in workplace grievances. The two sides had reached agreement over salaries, benefits, the right of union members to maintain and repair truck chassis used to haul shipping containers, and health care.
The tentative settlement still requires approval from dockworkers from San Diego CA to Bellingham WA.
“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 maritime association president James McKenna and McEllrath, the union president, in a joint statement. “We are also pleased that our ports can now resume full operations.”
The West Coast ports, which handle 43.5% of US trade, have been operating at lower capacity since October 2014 as dockworkers slowed cargo movement and port employers cut shifts.