Tentative deal ends shipping stalemate

West Coast shipping companies and dockworkers have reached a tentative 5-year contract agreement, ending months of protracted negotiations that caused a major backup in imports and exports, U.S. Labor Secretary Thomas Perez announced Friday evening.

While the agreement must still be ratified by members of the International Longshore and Warehouse Union and Pacific Maritime Association, tonight’s deal calls for ports to return to full operations as of tomorrow evening, Perez said.

Perez said the dispute, which has left farm produce rotting on the docks and retailers’ shelves empty, was taking a toll on the economy. At the direction of President Barack Obama, he said he had warned negotiators that if they did not reach a deal by today, they would be called to Washington, D.C. to continue talks at the White House:

“In the shipping business, reliability is your currency and this protracted dispute has undeniably produced a crisis of confidence in the west coast ports.”

Negotiations for a new ILWU contract at 29 ports including the Port of Oakland have been ongoing for nine months. A federal mediator joined the talks in January and Perez arrived in the Bay Area this week to help move negotiations along.

Among the last sticking points in approving a new contract were proposed changes in the appointments of arbitrators. Arbitrators are currently appointed for life, but union officials had said they are seeking the power for either management or labor to dismiss arbitrators after each contract period, typically six years.

The PMA characterized the demand as the union seeking the power to fire arbitrators who make decisions they disagree with. Perez tonight said the two sides had reached an agreement on a process for the selection of arbitrators.

Port of Oakland officials tonight hailed the agreement, but said it could take six to eight weeks to clear the backlog of cargo. The port currently has 13 vessels at berth and 16 awaiting berths, officials said today.

Chris Lytle, the Port’s Executive Director, said:

“We are pleased that an agreement has been reached. … Now it’s time for all sides to pull together and get cargo moving with the speed our importers and exporters need.”

The port has instituted measures including weekend gates, express lanes, additional truck parking and daily status reports for shippers, and plans to work with marine terminals, truck drivers and shipping lines now to expedite cargo movement, officials said.

Cargo volume at the Port of Oakland, which set an all-time record for volume in 2014, declined 32 percent in January from the same period a year ago due to the slow down and is thought to have declined further in February. Other West Coast ports have seen similar declines.

More than 73,000 jobs are connected to the Port of Oakland, officials said today. White House Press Secretary Josh Earnest said in a statement this evening that resolving the shipping crisis has been a “top priority” for Obama.

Earnest called the agreement:

“… a huge relief for our economy-particularly the countless American workers, farmers and businesses that have been affected by the dispute and those facing even greater disruption and costs with further delays.”

Pacific Maritime Association and ILWU officials said this evening that they would not be commenting on the details of the agreement. In a joint statement, PMA President James McKenna and ILWU President Bob McEllrath said:

“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry. … We are also pleased that our ports can now resume full operations.”