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East Coast Ports Contract Agreement Puts Importers at Ease Ahead of Holiday Shipping

Importers and exporters breathed a sigh of relief on word that the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) had reached a tentative contract agreement, avoiding any disturbance in shipments at East Coast and Gulf ports. The contract had been set to expire on Sept. 30.

“We have reached a tentative agreement on a six-year Master contract that is beneficial to both sides,” Harold J. Daggett, ILA president, and David F. Adam, chairman of USMX, said in a joint statement.

Some 200 ILA Wage Scale delegates unanimously approved the terms of the new agreement, following two days of negotiations in Delray Beach, Fla. The contract is subject to ratification by ILA members and by the USMX membership.

“This is good news,” Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation, said. “This agreement is very important for retailers who are now in the process of bringing in their holiday season merchandise and were worried that the current contract could have expired right in the middle of that season. Retailers can now count on receiving their merchandise without disruption to the supply chain. This ensures that we will have stability at East Coast and Gulf Coast ports over the next six years.”

NRF led more than 100 organizations in a March letter to the union and management urging both parties to resume talks after negotiations broke down earlier this year. The letter noted that East Coast and Gulf Coast ports picked up business after prolonged contract talks led to a slowdown and congestion issues at West Coast ports during 2014 and early 2015. If talks had not resumed, some of that business could have been lost back to the West Coast, the letter warned, saying contract-related disruptions can have “enormous adverse economic impacts.”

The agreement culminates months of tough negotiations between the ILA and USMX and both sides hailed the agreement that was reached months ahead of the expiration of the current pact. The two sides encouraged local ILA and management groups to finalize local agreements by July 10, prior to full membership ratification votes by the ILA and USMX. Details of the tentative contract agreement were not made available.