The Pacific Maritime Association and the International Longshore and Warehouse Union announced a tentative agreement on a new six-year contract covering workers at all 29 West Coast ports, a major step toward averting fresh supply-chain troubles for the US economy.
(Bloomberg) — The Pacific Maritime Association and the International Longshore and Warehouse Union announced a tentative agreement on a new six-year contract covering workers at all 29 West Coast ports, a major step toward averting fresh supply-chain troubles for the US economy.
The talks dragged on for more than a year to replace the previous contract that expired in July. Both parties must now ratify the agreement.
The deal, announced in a joint statement Wednesday, comes as the world’s largest economy struggles with inflation and rising interest rates, problems that would be exacerbated by port shutdowns.
While import volumes are down across the US, West Coast ports have been losing market share as shippers diverted their goods to East and Gulf Coast maritime hubs, in part to avoid potential disruptions.
President Joe Biden, in a statement on Wednesday night, hailed the tentative agreement as proof that “collective bargaining works” and said it delivered for port workers who “will finally get the pay, benefits, and quality of life they deserve” after working through the Covid-19 pandemic.
“We are pleased to have reached an agreement that recognizes the heroic efforts and personal sacrifices of the ILWU workforce in keeping our ports operating,” PMA President James McKenna and ILWU President Willie Adams said in a joint statement earlier Wednesday. “We are also pleased to turn our full attention back to the operation of the West Coast Ports.”
The parties did not release details of the agreement, which was reached with assistance from Acting US Secretary of Labor Julie Su.
“The tentative agreement delivers important stability for workers, for employers and for our country’s supply chain,” she said in a statement.
Biden praised Su for using her “deep experience and judgment” to help the sides “reach an agreement after a long and sometimes acrimonious negotiation.” Su faces a tough confirmation battle in the US Senate to lead the Labor Department on a permanent basis.
The White House had faced heightened calls from industry to intervene over the last two weeks as labor-related disruptions spread up and down West Coast ports. The administration preferred a resolution without its direct involvement, but was also keen not to have new supply chain disruptions arise as Biden begins his reelection campaign.
The US Chamber of Commerce estimated that a work stoppage at ports from Seattle to Los Angeles could have cost the economy $1 billion a day.
US retailers and importers who diverted goods to East and Gulf Coast ports during the year-long contract negotiations have said they won’t bring cargo back to the West Coast ports until a deal is ratified, which could take several weeks.
–With assistance from Augusta Saraiva.
(Updates with Biden comment, starting in fourth paragraph.)
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