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Dockworkers, shippers agree to resume West Coast port operations

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Ted S. Warren/AP

(Read caption) A cargo container ship sits docked at the Port of Tacoma. Negotiators have reached a tentative contract covering West Coast dockworkers, likely ending a protracted labor dispute that snarled international trade at seaports handling about $1 trillion worth of cargo annually.

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After nine months of contentious talks, dockworkers and shipping companies have reached a tentative agreement that would set cargo ships sailing again up and down the West Coast out of 29 ports from San Diego to Seattle.

“We are pleased to have reached an agreement that is good for workers and for the industry,” Pacific Maritime Association (PMA) president James McKenna and Bob McEllrath, president of the International Longshore and Warehouse Union (ILWU), said in a joint statement. “We are also pleased that our ports can now resume full operations.”

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The dockworkers' union and employers agreed to resume work Saturday evening, although it’s likely to take weeks if not months to unblock that traffic jam, as well as the gridlock of cargo containers sitting on docks.

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The PMA, which represents about 70 shipping companies and the ILWU had been negotiating a new contract since last May. While some of the biggest issues, including health care coverage and pensions, had been resolved, the talks were stuck over how to arbitrate future workplace disputes.

The tentative five-year contract reached Friday evening still must be approved by the 13,000-member union's rank-and-file, who handle about one-quarter of all US international trade – much of it with Asia – amounting to about $1 trillion worth of cargo annually.

Neither side released details of the agreement, but in a recent letter to maritime association members, Mr. McKenna outlined what he called employers' "last, best and final" offer. It included maintenance of nearly no-cost health coverage, an $11,000 increase in the maximum pension benefit to $91,000, and a $1-per-hour wage increase over each of the five years.

Though dockworker wages vary by job and skill level, the average exceeds $50 per hour, according to the maritime association, which represents ocean-going shipping lines and the companies that load and unload cargo at port terminals.

It took outside help to bring the two sides to resolution, including the Federal Mediation and Conciliation Service, US Labor Secretary Tom Perez, US Secretary of Commerce Penny Pritzker and Los Angeles Mayor Eric Garcetti.

“The parties persevered over a long and challenging process and were ultimately successful in averting any further situations that could have been disruptive to shipping operations and to the nation’s economy,” Allison Beck, acting director of the mediation and conciliation service, said in a statement Friday. “As a result of their efforts, shippers can expect that normal operations will be restored as soon as possible at our nation’s West Coast ports.”

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Secretary Perez  had warned negotiators that if they didn't seal a deal by midnight Friday, he'd haul them back to Washington, where a parade of elected leaders had been imploring resolution.

The National Retail Federation (NRF), the world’s largest retail trade association, lauded an end to what it called “crisis-level congestion and backlog at the ports.”

“We must dedicate ourselves to finding a new way to ensure that this nightmare scenario is not repeated again,” the association said in a statement. “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.”

Trade experts warn that the new contract won’t immediately resolve the delays, particularly at Los Angeles and Long Beach, which together handle roughly 40 percent of the nation’s incoming container cargo, the Los Angeles Times reports.

“The congestion stems in part from issues unrelated to the labor dispute,” the newspaper reported. “Before slowdown accusations surfaced in early November, the L.A and Long Beach ports already were struggling with the worst freight backlog in a decade, in large part because of a truck trailer shortage and the increased use of mammoth container vessels that hold more cargo.”

This report includes material from the Associated Press.