A tentative agreement was reached late last Friday, February 20 between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) 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.  Neither  parties releasing details of the agreement at this time.

The agreement is subject to ratification by both parties.  It has been reported that it may take ILWU up to 30 days for their process, which includes a caucus meeting to discuss the deal followed by a full membership vote.  There is no official time frame for when the vote is required to occur.

 “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,” the parties said in a joint statement last week.

The focus now will be to get ships and cargo moving again.  It has been reported that it will take six to eight weeks for West Coast ports to recover from the cargo backlog. The stalled negotiations has led to a backup that left merchandise at sea and retailers and manufacturers sending products by air and diverting to ports on the East and Gulf Coasts.  U.S. retailers are not yet seeing West Coast ports as a viable option and will continue to divert shipments elsewhere until the backlog is cleared.

The Ports of Los Angeles and Long Beach, the two busiest U.S. seaports that handle almost 40 percent of U.S. imports, are facing their largest backlog of ships in more than a decade.   Overall, the West Coast’s 29 seaports handle roughly one-quarter of U.S. international trade, an amount worth about $1 trillion annually.  It has been reported that the labor dispute will cost retailers an estimated $7 billion this year, mostly because of lost sales and higher shipping costs.

Meanwhile, the two Western railroads are taking steps to hand an expected increase in international intermodal traffic.  Union Pacific Railroad is deploying additional locomotives, rail cars, and trains crews and said it will “provide unit trains for high-density terminals to improve turn times, and facilitate higher train counts and longer trains.”  BNSF Railway said it will undo westbound container restrictions that have been in place at some ports to match the increased production capabilities of corresponding marine terminals.