Contract Negotiations at U.S. West Coast Ports Clear Major Hurdle

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January 27, 2015

ReutersBy Steve Gorman

LOS ANGELES, Jan 27 (Reuters) – Negotiators for major shipping lines and the union representing 20,000 dockworkers have reached a tentative agreement on the maintenance of cargo chassis, overcoming a key hurdle in protracted contract talks for 29 U.S. West Coast ports.

Settlement of the chassis issue, and the labor talks in general, has been seen as crucial to resolving months of chronic cargo backups hampering ports that handle nearly half of U.S. maritime trade and more than 70 percent of imports from Asia.

“A tentative agreement was reached on the chassis topic, and we are hopeful that this will allow us to move toward conclusion of a full agreement in the near term,” Wade Gates, spokesman for the Pacific Maritime Association, said on Tuesday. The group is the bargaining agent for shipping companies and terminal operators in the federally mediated talks.

The International Longshore and Warehouse Union did not comment publicly. But a union source familiar with the status of the talks confirmed that a preliminary deal was reached earlier in the week governing maintenance, repairs and inspection of cargo chassis.

The companies have accused the union of instigating work slowdowns at several ports to gain leverage at the bargaining table. Cargo that normally takes two or three days to clear the ports has faced lag times of up to two weeks, with productivity at some waterfronts cut by at least half, industry analysts say.

The union, which denies causing the bottle-necks, has countered that the shippers themselves are largely to blame for business decisions that have disrupted port operations.

Chief among these have been shortages of tractor-trailer chassis used for hauling cargo from ports to warehouses, a result of outsourcing by shippers to third-party leasing companies. Officials of the ports themselves also have cited chassis distribution problems as a major factor in the gridlock.

Among the ports hit hardest have been Los Angeles and Long Beach, the two busiest U.S. container cargo hubs, as well as Oakland and Seattle-Tacoma. Industry officials have reported prolonged delays in shipments of products ranging from apparel and toys to agricultural produce. (Reporting by Steve Gorman; Editing by Peter Cooney and Sandra Maler)

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