Port of Long Beach

Container ships wait offshore to get into the Port of Long Beach on Feb. 11. (Bob Chamberlin / Los Angeles Times)

By Andrew Khouri, Chris Kirkham and Peter Jamison
February 20, 2015

Shipping companies and dockworkers reached a tentative deal late Friday on a new labor contract, avoiding a shutdown of 29 ports that would have choked off trade through the West Coast.

The agreement, which still needs approval from union members and individual employers, should start easing severe congestion that’s been building for months at the nation’s busiest ports, in Los Angeles and Long Beach, along with other major gateways.

Details of the proposed five-year contract for about 20,000 West Coast dockworkers were not released. The dockworkers have been without a contract since July. The two sides had been negotiating since May.

The dispute caused businesses across the nation to lose money because imports were trapped on boats and exports trapped on land.

“We heard from small-business owners, large-business owners, farmers who couldn’t get their produce or their meat to market,” U.S. Labor Secretary Thomas Perez told reporters in San Francisco, where he joined contract talks this week to push for a settlement.

“This is now in the rear-view mirror,” Perez said. “A significant potential head wind for this economic recovery has been removed.”

The deal alleviates fears of a protracted shutdown that had intensified as negotiations stalled. In recent weeks, the employers — major shipping lines and cargo terminal operators — intermittently halted the loading and unloading of ships while accusing the union of staging work slowdowns.

The talks between employer group Pacific Maritime Assn. and the International Longshore and Warehouse Union were the most contentious since 2002, when employers accused the dockworkers union of engaging in slowdown tactics and locked out workers for 10 days.

Trade experts cautioned that the new contract won’t immediately resolve the delays, particularly at L.A. and Long Beach, which together handle roughly 40% of the nation’s incoming container cargo.

It will take weeks, if not months, just to clear the current backlog, port officials said.

The congestion stems in part from issues unrelated to the labor dispute. 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.

At the Port of Los Angeles, a single ship often carries 14,000 containers. Two years ago, a large ship would have held 8,000 to 10,000 of the steel boxes.

“These terminals were sized, in some cases, decades ago for ships a quarter or a third of the size,” said Paul Bingham, a global trade economist with Hackett Associates.

Making matters worse, the larger ships now carry cargo from multiple shipping lines, and the containers often aren’t sorted in a way that they can be swiftly moved out of port.

“It’s going to take some time to sort those things out,” international trade expert Jock O’Connell said.

Businesses were nonetheless glad to see the dispute end.

“The Los Angeles business community is relieved and appreciative that a new labor contract has been agreed to at our ports,” said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce.

He urged the employers and union “to move rapidly to eliminate the current logjam and bring reliability back to those businesses who rely on the ports.”

National Retail Federation President Matthew Shay called for “the parties to quickly ratify the deal and immediately focus on clearing out the crisis-level congestion and backlog at the ports.”

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