Port strike in eastern U.S. averted with contract extension

A strike that would have shut down many of the nation’s major seaports on the East and Gulf coasts has been averted by a contract extension.

The International Longshoremen’s Assn. and the United States Maritime Alliance have reached an agreement on so-called container royalty fees, one of the most contentious issues in the labor negotiation, said George H. Cohen, director of the Federal Mediation and Conciliation Service, which has been mediating the dispute.

The agreement on the fees, which supplement dockworker wages, postpones any strike action until at least late January. Employers have sought to cap the royalty fees and limit who gets them. The longshoremen’s union opposed those changes.

“The container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement,” Cohen said in a statement.

The more than 15,000 dockworkers involved in the dispute work at 14 ports that are among the busiest in the nation.

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According to American Assn. of Port Authorities statistics, those ports handle 44% of the cargo containers that enter or leave the U.S. They include the Port Authority of New York-New Jersey, which ranks third behind the ports of Los Angeles and Long Beach in cargo container traffic.

Savannah, Ga., the nation’s fourth-busiest container port, and Houston, the busiest container port on the Gulf Coast, also would have been shut down by the strike.

The longshoremen’s union has been bargaining since March on a new six-year contract with the Maritime Alliance, which represents cargo shipping lines, cargo terminals and port associations on the East and Gulf coasts.

When the last multiyear contract expired in September, both sides agreed to a 90-day extension that was set to expire this weekend.

There were sharp differences of opinion on the effect that such a strike would have on the nation’s economic recovery.

Jock O’Connell, an international trade advisor for Beacon Economics, said a temporary interruption of the flow of cargo to those ports would not bring the nation’s economy to its knees.

But the possibility of another strike, on the heels of a walkout that idled most of the Port of Los Angeles and half of the Port of Long Beach for eight days beginning in late November, had retailers, manufacturers, farmers and other port customers clamoring for federal intervention to move talks quickly toward a resolution.

On Thursday the Obama administration urged both sides to “continue their work at the negotiating table to get a deal done as quickly as possible” to avoid a strike.

The National Retail Federation, which represents many of the nation’s largest retail chains, said Friday that it was pleased to learn of the latest contract extension, but referred to it as only a temporary reprieve.

“We continue to urge both parties to remain at the negotiating table until a long-term contract agreement is finalized,” said Matthew Shay, chief executive of the retail federation.

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