"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 International Longshore and Warehouse Union (ILWU) President Bob McEllrath, in a joint statement. "We are also pleased that our ports can now resume full operations."
The new five-year deal affects 29 ports from San Diego to Seattle that handle roughly 25% of all U.S. international trade. Because the deal must be ratified in a membership vote, specifics of the contract have not been publicly disclosed. What is known is that negotiators most recently were at odds over the arbitration system used to resolve workplace grievances. The new deal reportedly outlines a process by which a panel will hear disputes, instead of individual arbitrators deciding them.
With an agreement reached, President Obama has urged shippers and dockworkers to efficiently untangle backlogs, so cargo can now get to where it's needed faster. "This is great news for the parties involved 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 within further delays," said White House press secretary Josh Earnest.
The dispute between the PMA and ILWU had become contentious since the fall, leading to slowdowns by workers and temporary lockouts by shippers. Legislators, manufacturers and trade groups had called on negotiators to agree to a deal before the situation grew worse. This week, the focus has shifted to how to prevent similar protracted conflicts in the future.
"We must dedicate ourselves to finding a new way to ensure that this nightmare scenario is not repeated again," said the National Retail Federation, in a statement. "If we are to truly have modern international trade, supply chain and transportation systems, we must develop a better process for contract negotiations moving forward."
Companies in many industries, including ad specialty firms, were impacted by the congested ports. Just last week, several Top 40 suppliers told Counselor that delays had strained inventory levels and even caused customer cancellations. While a deal being reached is a positive step, officials say it will still take weeks for some cargo to be unloaded.