Port Strike Averted As Dock Workers, Terminal Operators Agree To Extension

By Scott Neuman

Published December 28, 2012 at 12:04 PM EST

Longshoremen and East Coast and Gulf Coast port operators have agreed to an extension on labor negotiations, a federal mediator said Friday, averting a potentially crippling strike that would have halted container traffic at many of the nation's largest seaports.

Update at 4:45 p.m. ET: The temporary deal extends the contract to Feb. 6.

George H. Cohen, director of the Federal Mediation and Conciliation Service, which has overseen negotiations that were set to expire at midnight Saturday, announced the extension on Friday. Cohen said the key sticking point — bonuses paid to its 14,650 workers on every container loaded — had been "agreed upon in principle by the parties."

"The parties have further agreed to an additional 30 days ... during which time the parties shall negotiate all remaining outstanding Master Agreement issues," he said.

The impasse had been dubbed the "container cliff," with all the incumbent warnings of dire consequences to the economy. It would have been the first walkout by longshoremen in the U.S. since 2002 — when a West Coast strike lasted 10 days — and the first such work stoppage on the East Coast since 1977.

A strike would have disrupted 40 percent of the nation's container traffic by shutting down the third- and fourth-largest U.S. ports by volume — New York/New Jersey and Savannah, Ga.; and 12 others.

The National Retail Federation said such a strike could cost $1 billion a day, although that figure has been disputed.

It's not immediately clear what broke the logjam, but the Obama administration stepped up pressure on Friday, with White House spokesman Matt Lehrich calling for a deal to be done "as quickly as possible."

Meanwhile, Florida Gov. Rick Scott had urged the president to invoke the Taft-Hartley Act to break a strike if necessary. Taft-Hartley was last used by President George W. Bush to break the 2002 West Coast port strike.

The labor dispute came at a time when East Coast and Gulf Coast port operators are spending billions of dollars on new infrastructure to accommodate bigger ships that will be coming through the Panama Canal after the inauguration of a major widening of the lock system there.