Fourteen major shipping lines reached a tentative contract deal on Thursday with clerical workers for cargo terminals at Los Angeles and Long Beach, averting a threatened strike at the two busiest U.S. seaports.
The clerks' union and their employers have been negotiating a three-year contract to replace one that expired on June 30 at the two California ports, which handle roughly $275 billion worth of cargo a year combined and account for 40 percent of U.S. container imports.
Leaders of the larger Longshoremen's union had indicated their members would refuse to cross picket lines if the clerks called a strike, which would have shut down the twin ports.
The tentative accord came five days after the 930-member Local 63 of the Marine Clerks Association of the International Longshore Warehouse Union submitted what it called its last, best and final offer to shippers. Management at the ports had presented its final proposal late on Tuesday.
The settlement, which still must be ratified by union rank and file, would provide base wage increases amounting to $2.50 an hour over the next three years, bringing a full-time clerk's hourly salary to $40 by the end of the contract, said Stephen Berry, lead negotiator for the shipping companies.
Berry also said the proposed contract would establish trust funds to manage employees' health and pensions plans, at a cost of $3.4 million. The trust funds would be overseen by a board equally divided between management and union representatives.
A union official called the establishment of the funds a major victory and the contract's crowned jewel.
We achieved what we came to do, said Steve Schwab, vice president of the clerks' union, who said support from the parent union provided the strength needed at the bargaining table to achieve a fair settlement.
The new labor agreement also includes a nonbinding provision calling for clerks employed by three separate shipping lines to negotiate their contract at the same time as the other 14 covered by Thursday's settlement in the future, Berry said.
I'm very happy and satisfied, the companies' lead negotiator said. And I think that all the employers are. We're ready to move forward.
The contract talks began in May and had continued beyond a strike deadline set by the union for July 16.
In 2002, ILWU workers were locked out of their jobs by the shippers for 10 days in a contract dispute that cost the U.S. economy an estimated $1 billion a day.