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West Coast Shippers, Union Agrees on Contract

The tentative accord averts a work stoppage at 29 ports.

Negotiators for West Coast shippers and the longshoremen’s union reached a preliminary, six-year agreement to replace a contract that expired July 1 and ensure that operations at the region’s 29 ports aren’t disrupted.

This story first appeared in the July 30, 2008 issue of WWD.  Subscribe Today.

Details of the new accord for about 26,000 International Warehouse and Longshore Union workers at the California, Oregon and Washington State ports were not released pending a vote on the contract. Barring unforeseen developments, the membership is expected to go along with their leaders.

ILWU president Bob McEllrath and Jim McKenna, president of the Pacific Maritime Association, which represents 71 cargo carriers, terminal operators and stevedores, sealed the tentative contract with a handshake Monday after marathon weekend talks in San Francisco. PMA members also must approve the contract.

“The proposed agreement meets the needs of both workers and the industry,” said McEllrath and McKenna. “It allows West Coast ports to be competitive and provides the good jobs that workers and communities need.”

Given the turbulent economy, there was pressure on both sides to settle their differences on key contractual issues, including wages, benefits packages, technological advances and conditions of employment.

As talks dragged on after starting March 17, fears mounted that there would be a prolonged stalemate, with the worst-case scenario being a repeat of the 10-day lockout in 2002 that caused an estimated $15 billion loss to the domestic economy.

“Everyone sees this as a dramatic departure from the 2002 experience,” said Craig Merrilees, an ILWU spokesman. “These negotiations have been marked by slow, steady deliberate progress that ultimately resulted in the final agreement.”

Art Wong, a spokesman for the Port of Long Beach, which combined with the Port of Los Angeles handles about 40 percent of U.S. imports, indicated that some cargo was diverted to avoid any disruption sparked by potential labor-management disputes. “That is typical of the negotiation years,” he said.

The diversion, coupled with the sour economic conditions, has caused volume at the ports of Long Beach and Los Angeles to drop 8 percent this year, Wong said.

“Earlier in the year, we were hearing forecasts for things to pick up in the second half of the year, but there has been no sign of that,” he said. “In fact, we had the sharpest drop in June for the two ports that we have had in many, many months.”