The International Longshore and Warehouse Union and port operators along the U.S. West Coast have finally reached a tentative agreement on a new labor contract following months of talks. Since the June 30, 2014 expiration of the labor contract between the ILWU and the Pacific Maritime Association contentious talks have been ongoing. International Longshore and Warehouse Union reached a deal Friday on a five-year contract, ending nine months of talks. It will take six to eight weeks to relieve cargo congestion at ports from San Diego to Bellingham, Washington, where productivity has been reduced by as much as half since November. U.S. Labor Secretary Thomas Perez arrived in San Francisco last week to take part in talks and pushed for a resolution on the last significant roadblock, which was the union’s demand to be able to unilaterally fire arbitrators who hear workplace grievances.
On Thursday, Perez gave both sides until Friday to come to an agreement or he would move the talks to Washington. The two sides agreed on a compromise he brokered that would replace the single arbitrator with a panel. The union and management have declined to release details of the tentative agreement, including wages and benefits, until it's presented to members. Port operations began returning to normal by Saturday night as workers arrived to unload cargo. Dockworkers will decide whether to approve the agreement. Ports will be working to relieve the backlog as vessels that have been anchored offshore fill their terminals. Some retailers will resume shipments to West Coast ports after diverting cargo to ports in the East Coast, Gulf Coast, Canada and Mexico.
How Bad is the Backlog?
Very bad. The 24 container ships anchored Monday outside the ports of Los Angeles and Long Beach hold so much cargo that if all their containers were stacked up they would rise more than 300 miles, greater than the orbiting altitude of the International Space Station. And that's just Southern California. There are smaller, yet significant, backups in San Francisco Bay and Puget Sound in Washington state.
The bottleneck has ensnared farm and manufacturing exports as well as imported auto parts, toys, furniture and coffee beans, just about anything the United States trades with Asian nations. Cost estimates are still being tallied but one certainty is higher retail prices on imported goods.