According to the Los Angeles Times, dockworkers and shipping lines reached a tentative contract agreement late last week, narrowly avoiding what could have been a catastrophic shutdown of the busiest docks in the United States.
The 29 West Coast ports, including Los Angeles and Long Beach, will remain open and functional now that the labor contract has been reached, much to the relief of American retailers that rely on those ports for the shipment of goods.
The agreement still has to get approval from individual employers and union members. As of now, the contract is set to last for five years and involves about 20,000 West Coast dockworkers, all of whom have been in negotiations since May of last year and without a contract since July. The details of the new contract are still unknown.
Business across the U.S. lost money as a result of the port negotiations and congestion, because many imports were stuck at sea and exports remained on the docks. Shipping lines stalled the loading and unloading of goods and accused the dockworkers of purposefully slowing their work.
"We heard from small-business owners, large-business owners, farmers who couldn't get their produce or their meat to market," U.S. Labor Secretary Thomas Perez told reporters as he pushed for a contract solution in San Francisco. "This is now in the rear-view mirror. A significant potential head wind for this economic recovery has been removed."
The ports of Los Angeles and Long Beach collectively handle about 40 percent of the country's incoming container cargo, and port officials say that it will take weeks to months before the current backlog will be cleared.
This is in part because congestion was not only caused by the extended labor negotiations: The backlog was also caused by a truck trailer shortage and container vessels of an unprecedented size that were delivering more cargo than could be speedily processed. These mammoth vessels also carry orders from different shipping lines, which arrive at the docks in an unorganized manner, making efficient dispatching almost impossible.
Port officials are hoping these efficiency issues can be sorted out now that the labor contract has been reached.
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