The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) announced Feb. 20 a tentative agreement on a new five-year contract covering workers at all 29 West Coast ports. The deal was reached with assistance from U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh. The parties will not be releasing details of the agreement at this time. The agreement is subject to ratification by both parties.

“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 PMA president James McKenna and ILWU president Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”

President Obama commended the two parties, asking them to work together to clear out the backlogs and congestion in the West Coast ports as they finalize their agreement.

“This is great news for the parties involved in the negotiation 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,” Obama said.

Prior to the two parties reaching an agreement, the West Coast disruption was costing U.S. exporters of agricultural products approximately $1.75 billion each month. The American Meat Institute and the National Pork Producers Council estimated that the West Coast delays were costing each industry $40 million per week.

“We applaud the two sides for bringing a resolution to this lengthy dispute that has had a punitive impact on U.S. agriculture and the overall economy,” said Mike Steenhoek, executive director of the Soybean Transportation Coalition. “We encourage the membership of the ILWU and the PMA to quickly ratify the agreement.” 

In announcing the decision, Perez said that ports along the West Coast will resume working “fore bore” Saturday in order to clear the backlog in container traffic.

The North American Meat Institute estimated it could take an additional 30-45 days to clear the backlog of containers that has built up at the ports.

Relationships damaged?

The contract dispute might be settled, but the ripple effects will keep flowing for months, possibly years from what occurred.

A statement from U.S. Meat Export Federation president and CEO Philip Seng said that since they began seeing increased congestion in the West Coast ports several months ago, “the global customer base that the U.S. meat industry has spent decades buildings has been put at risk by shipping delays and by the uncertainty surrounding these contract negotiations.”

Steenhoek shared that they’re hopeful the severe backlog of cargo can be quickly relieved. However, more importantly, he hopes that the U.S. reputation as the world’s most reliable supplier of agricultural and other products can be quickly restored.

“The reality with good reputations is that they take years to accumulate and moments to evaporate,” Steenhoek said. “U.S. agriculture remains able to earn the business of our international customers. We are hopeful that our West Coast ports will facilitate this process and no longer be an obstacle to it. If we truly want to be the world’s preeminent exporters of agricultural and other products, we need to have a system of ports, including those dockworkers who service them, committed to this goal as well.”

NAMI also suggested that Congress and the White House look for ways to avoid this situation in the future, “otherwise the situation will be repeated in both 2017 and 2019 when both coasts’ labor contracts expire once again.”