After nine months of stalled negotiations, West Coast port operators and the dockworker union reached a tentative five-year contract agreement late Friday. The union and employers will both have to ratify the deal.
“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry,” said Pacific Maritime Association president James McKenna and International Longshore & Warehouse Union president Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”
While specific terms of the agreement were not disclosed, the settlement was met with both relief and enthusiasm from the footwear business.
“The footwear industry is extremely excited about tonight’s announcement,” said Matt Priest, president of the Footwear Retailers and Distributors of America in a release. “Our members and the industry at large rely on a complex and innovative global supply chain to deliver footwear to American consumers. Recent delays distinctly highlighted the importance of collaborative and efficient operations at our nation’s ports. We applaud both the [Maritime Association] and the [union] for working so hard to find a resolution to the negotiations and look forward to full adoption of the agreement and the immediate resumption of port operations.”
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National Retail Federation president and CEO Matthew Shay said in a statement: “We congratulate the [union] and [Maritime Association] for finally coming to agreement on a new labor contract. It is now time for the parties to quickly ratify the deal and immediately focus on clearing out the crisis-level congestion and backlog at the ports.”
On Tuesday, Secretary of Labor Thomas Perez arrived in California to help smooth negotiations that had become increasingly strained, culminating in a four day shutdown of the ports for the President’s Day holiday. Perez told both parties if an agreement was not reached by the end of the day on Friday he would move the talks to Washington D.C.
While the contract is a welcome sign of relief, there are still challenges ahead for business. There is a significant backlog of goods at the ports, which some supply chain experts anticipate will take up to six months to clear out and for operations to return to normal. Experts also are watching to see if businesses return as enthusiastically to the West Coast ports or if many continue to use alternate shipping routes.
“Over the next few weeks, we will start to see a slight reduction in congestion at the ports. However, with thousands of containers stacked up on boats and dockside, we strongly encourage the ports and longshoremen to work together to unwind the large backlog and help us get our footwear through the ports and into our warehouses as quickly as possible,” said Priest.