SAN FRANCISCO, Calif. - Terminal operators at 29 West Coast ports reached a tentative five-year contract agreement with the International Longshore and Warehouse Union (ILWU) Friday, after a final four days of intense negotiations involving the U.S. Secretary of Labor Thomas Perez.
"We are pleased to have reached an agreement that is good for workers and for the industry," said Pacific Maritime Association(PMA) President James McKenna and the International Longshore and Warehouse Union (ILWU) President Bob McEllrath in a joint statement issued hours after the deal was announced, "We are also pleased that our ports can now resume full operations."
The deal, reached at 6 p.m. Friday will allow work to resume immediately on the massive backlog of shipping containers that piled up at port terminals, on ships, and at trucking company lots during the nine months of stalled negotiations.
Port of Oakland officials said it could take six to eight weeks to clear the backlog of cargo in the Bay Area and the port has instituted measures including weekend gates, express lanes, additional truck parking and daily status reports for shippers, to expedite cargo movement.
Secretary Perez said President Obama told him Thursday night that a contract deal must be completed by Friday or both sides would be summoned to the White House to resolve the dispute.
Perez said the stalemate between port operators and the ILWU workers threatened to hurt the U.S. economy by stopping worldwide supply chains that run through the West Coast ports, including agricultural products, auto parts, and a vast array of retail goods.
Secretary Perez says the new contract could fundamentally improve efficiency of all West Coast ports in the future.
Craig Merrilees, and ILWU spokesman told KTVU that Secretary Perez gained respect of the negotiators and did help break the stalemate.
The new contract brings compromise around the main sticking point, the arbitration system for resolving union-employer disputes.
"There will be some changes coming and there will be some new faces handling those arbitrations," Merrilees said.
KTVU has learned a new system will replace the four regional arbitrators with four teams of three people each. Instead of lifetime terms, the union and the PMA will have a process for objecting to or removing arbitrators they deem unfit.
Secretary Perez held a press briefing by phone, an hour after the deal was signed, saying the new arbitration system could mean a lasting improvement in all 29 West Coast ports' work flow.
"I think this will be one of the most critical issues to improve efficiency of ports on the West Coast," Perez said.
The union says the new contract also solves another big concern. Workers had objected to the outsourcing of container chassis work that port operators had instituted during the past 2 years. The new contract prohibits outsourcing of container chassis maintenance, repairs, and inspection.
Secretary Perez acknowledges that despite the deal, West Coast port customers will continue feeling the pain until the backlog ends.
"In the shipping business, reliability is your currency and this protracted dispute has undeniably produced a crisis of confidence in the West Coast ports," Perez said.
"We are pleased that an agreement has been reached," said Chris Lytle, the Port's Executive Director. "Now it's time for all sides to pull together and get cargo moving with the speed our importers and exporters need."
As for preventing this in the future, KTVU asked the Secretary directly whether federal officials should have stepped in earlier.
Secretary Perez told KTVU that he felt the Federal Mediation And Conciliation Service Deputy Director Scot Beckenbaugh had done important work bringing the two sides significantly closer together since January and that "the federal collective bargaining process should be used."
White House Press Secretary Josh Earnest said in a statement Friday evening that resolving the shipping crisis has been a "top priority" for Obama.
He called the agreement great news and "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."
The deal must be ratified by the ILWU members.
The union plans to start assembling contract details and distributing information to rank and file as soon as Saturday, but no date has been set for the ratification vote.