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Tentative Pact Thwarts East Coast Port Strike

A consortium of shipping companies and terminal operators, and a labor group of dockworkers, reached an agreement on a master contract late Friday.

WASHINGTON — A consortium of shipping companies and terminal operators, and a labor group of East and Gulf Coast dockworkers, reached a tentative agreement on a master contract late Friday, averting a strike that could have impacted millions of dollars in apparel, textile and footwear imports.

This story first appeared in the February 4, 2013 issue of WWD.  Subscribe Today.

The Federal Mediation and Conciliation Service said the U.S. Maritime Alliance (USMX), representing the container carriers and marine terminal operators at 14 ports from Maine to Texas, and the International Longshoremen’s Association, representing 15,000 members, have tentatively agreed to a final contract after 10 months of negotiations.

About 20 percent of all apparel, textile and footwear trade moves through the 14 ports, which handled more than 110 million tons of cargo in 2011, the most recent data available.

“I can report that the tentative agreement reflects the culmination of good faith negotiations in which the parties successfully accommodated strongly held competing positions because of their commitment to problem solving,” said George H. Cohen, director of the FMCS.

The tentative agreement on a master contract is subject to ratification by both sides as well as to agreements being reached in several local union negotiations, Cohen said.

Apparel brand and retail groups, which had lobbied for federal intervention and a quick resolution to the breakdown in talks, welcomed the news of the tentative agreement.

“The retail industry, which supports one in every four U.S. jobs, is pleased to hear that the ILA and USMX have reached a tentative, long-term master contract,” said Matthew Shay, president and chief executive officer of the National Retail Federation. “If the tentative agreement holds, the new labor contract will bring much-needed certainty and predictability to the supply chain for retailers, manufacturers, farmers and other industries that rely on the ports to move the nation’s commerce and trade.”

Kevin Burke, president and ceo of the American Apparel & Footwear Association, said, “Last night’s news [on Friday] of a tentative agreement to keep America open for business is welcome news.

“This tentative agreement restores the predictability the four million U.S. apparel and footwear industry workers in our industry count on to ensure all Americans have access for affordable and fashionable clothes and shoes,” Burke said. Details of the tentative agreement were not released.

Talks between the dockworkers and shipping companies broke down Dec. 18 over unresolved issues such as container royalties — the payments to union workers based on cargo weight that have been in practice since the Sixties when containerization and automation took hold.

Federal mediators have been involved in the talks since September.