Three months after a labor showdown closed West Coast ports and sent shivers through the U.S. economy, union dockworkers have overwhelmingly ratified a contract that ensures stability on the waterfront for the next six years, officials said Wednesday.
The deal, brokered last fall with the help of federal mediators, was approved by nearly 90% of the voting members of the International Longshore and Warehouse Union -- the highest approval rate in the union's history, said ILWU spokesman Steve Stallone. It offers generous health and pension benefits in exchange for allowing terminal operators to introduce labor-saving technology.
"This is a significant victory not just for the ILWU but the labor movement as a whole," Stallone said. "The ILWU sets the benchmark for other labor contracts, and I think we set a good standard."
The deal, which takes effect Feb. 1, allows shipping companies to begin using satellite tracking, electronic data transfer and other technologies that have become commonplace around the world. These changes are expected to eliminate several hundred high-paying union clerical jobs.
The Pacific Maritime Assn., which negotiated the deal on behalf of shipping lines and terminal operators, says implementation will vary among the individual companies it represents.
"In some cases, I think we'll see improvements this year," PMA spokesman Steve Sugerman said.
The contract agreement follows months of labor strife that culminated with a 10-day management lockout at ports from San Diego to Seattle. More than 125 cargo ships were stranded along the coast, and retailers grew panicked that holiday season merchandise would not reach their shelves.
President Bush ended the lockout Oct. 8 by invoking the rarely used Taft-Hartley Act to obtain a federal court injunction to reopen the ports. The injunction also banned the union from staging work slowdowns. Afterward, three federal mediators and a top AFL-CIO official spent weeks in San Francisco helping to keep negotiators at the table until a deal was struck.
On Wednesday, Labor Secretary Elaine Chao issued a statement saying the ratification vote "shows that the collective bargaining process can work when parties commit to addressing issues through good-faith negotiations."
About $300 billion worth of goods -- as diverse as lawn chairs and automobiles -- flow through the West Coast ports every year, and the volume is projected to double over the next decade. Terminal operators said they needed the new technology to handle the growth, while the union said the PMA merely wanted to outsource jobs and dilute the union's strength.
Despite the contract, union jurisdiction over jobs related to the new technology may continue to be a sore point. The accord creates a new arbitration system that employers say will be speedier and fairer than the old system. Stallone predicted that it would be tested soon.
"We fully expect there to be difficulties," he said. "I'm sure the arbitration process is going to get a workout."
In return for concessions on technology, the agreement raises pensions by more than 50% to a maximum benefit of $63,000 a year. Employers also agreed to absorb all increases in health-care costs so that members would continue to receive fully paid family health insurance.
Wages, which according to the PMA range from $80,000 to $150,000 annually, will increase 11% over the next six years.
The lockout and work disruptions created a huge cargo backlog, which is still in the clearing stages, according to Stephanie Williams of the California Trucking Assn.
"Our drivers are waiting four hours to pick up a container," Williams said.
Sugerman of the PMA said congestion was not related to the lockout, but instead caused by retailers that are leaving containers on the docks longer than usual because of soft sales.
Williams disputed that and said retailers were anxious to get their goods off the docks. "It's the backlog," she said. "It's been like this since October, and we don't expect it to clear up until at least February."