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West Coast Port Contracts Might Get Extended

West Coast dockworkers and shipping companies are thinking about extending the five-year labor contract they agreed on in 2015.

The extension would mean more time without a potentially crippling slowdown and subsequent congestion and shipping delays as happened last year when both sides were trying to settle the contract.

Commerce Secretary Penny Pritzker met with the International Longshore Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which represents port employers, on Friday and said the dockworkers and their employers are officially considering an extension, The Wall Street Journal reported.

The PMA sent a letter to the ILWU suggesting the contract extension and the ILWU confirmed receipt, saying they would discuss it at an upcoming caucus.

After nine months of talks, the two sides reached an agreement on a labor contract for workers at all 29 West Coast ports in February last year. Benefits had been one of the more contentious points in the contract talks and part of what contributed to the prolonged negotiations. Workers who weren’t getting their way opted to slow their pace of work, cargo piled up and goods got to retailers late.

It took some months to clear the backlog and restore productivity at the ports, but last week the Port of Los Angeles—one part of the nation’s busiest gateway for goods (the Port of Long Beach is the other)—reported its busiest first quarter in 109 years.

The port processed more than 2 million twenty-foot equivalent units (TEUs) in the first three months of 2016, an 11.3% jump over the same period last year.

In Long Beach, cargo shipments were up 6.1% thanks to big gains in January and February, making for the port’s best quarter since 2007.

Retailers and manufacturers represented by the American Apparel and Footwear Association (AAFA) and the Footwear Distributors and Retailers of America (FRDA), called on the ILWU and the PMA in a letter last month, asking that they start discussing a contract extension right away.

“Agreeing early to a long-term contract will provide the stability and predictability out collective members need, while protecting against any self-inflicted harm to the broader U.S. economy,” the letter said.

The previous labor contract expired in 2014 and as of now, the current contract is slated to be up June 30, 2019.