Last updated: March 16. 2013 10:02PM - 273 Views
By RONALD D. OROL, MarketWatch (MCT)

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WASHINGTON – A longshoremen's union and shipping companies at East Coast and Gulf Coast ports reached a tentative agreement late Friday night for the handling of cargo containers, averting a strike that could have incapacitated shipping along the East Coast and reportedly cost the economy more than $1 billion a day.

I am extremely pleased to announce that the parties have reached a tentative agreement, Federal Mediation and Conciliation Service Director George Cohen, a mediator brought in to assist in negotiating a deal, said in a statement.

The International Longshoremen's Association, which represents 14,650 workers handling cargo nationwide, and the U.S. Maritime Alliance, a group of container carrier companies and port associations along the East and Gulf coasts, have been in concentrated negotiations since last year.

The longshoremen's union has threatened to strike during that period, according to the report, which could have crippled container cargo exports and imports to the eastern U.S.

A strike could have cost the economy $1 billion a day, limiting the availability, or raising prices, of consumer goods, according to an Associated Press report.

The report noted that the largest port involved was the Port of New York and New Jersey, where 3,250 longshoremen work mainly at container terminals in Newark and Elizabeth.

Cohen said that the Maritime Alliance and the Longshoremen's association will not disclose the details of the deal out of respect for the parties' ratification process. He added that the deal is still subject to ratification.

The New York Times reported that the sides reached a deal on the main point of their dispute, which was focused on container royalty payments that shipping companies share with union members for each ton of cargo handled.

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