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Strike averted for now at key ports in U.S.

In this Dec. 18, 2012 file photo, a truck driver watches as a freight container, right, is lowered onto a tractor trailer by a container crane at the Port of Boston in Boston. The crane and a reach stacker, left, are operated by longshoremen at the port. (Associated Press: STEVEN SENNE)

The Associated Press

12/28/2012

NEW YORK  — A deal was made Friday that for now averts a strike by 14,500 longshoremen at major ports on the U.S. East Coast and Gulf of Mexico that would have threatened the country's economy.

A federal mediator announced that an expired contract for workers in the International Association of Longshoremen would be extended for 30 days while negotiations continue.

The longshoremen had been preparing for a possible strike Sunday that probably would have crippled operations at ports that handle about 40 percent of all U.S. container cargo.

The White House had weighed in on the issue, urging dockworkers and shipping companies Thursday to reach agreement "as quickly as possible" on a contract extension.

The 15 ports involved in the labor dispute move more than 100 million tons of goods each year. Losing them to a shutdown, even for a few days, could cost the economy billions of dollars.

Major steps have been made toward resolving the dispute, said George Cohen, the head of the Federal Mediation and Conciliation Service.

The extension came after the union and an alliance of port operators and shipping lines resolved one of the more challenging points in their monthslong contract negotiations, involving royalty payments made to union members for each container they unload.

The Alliance has argued that the longshoremen, who it said earn an average $124,138 per year, are already well compensated.

Negotiations will continue until at least midnight on Jan. 28.

"While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period," Cohen said.

The master contract between the International Longshoremen's Association and the U.S. Maritime Alliance, a group representing shipping lines, terminal operators and port associations, originally expired in September. The two sides agreed to extend it once before, for 90 days, but it had been set to expire again on 12:01 a.m. Sunday.

A work stoppage would have idled shipments of a vast number of consumer products, from electronics to clothing, and kept U.S. manufacturers from getting parts and raw materials delivered easily.

Major ports that would have been frozen included the Port Authority of New York and New Jersey, Savannah, Georgia, Houston and Hampton Roads, Virginia.

"The global economy moves by water, and shutting down container ports along the East and Gulf coasts while the national economy remains fragile benefits no one," Deborah Hadden, acting port director at Massport, the public agency that oversees shipping terminals in Boston. It is not a part of the contract dispute.

A work stoppage would not be absolute. Longshoremen would continue to handle military cargo, mail, passenger ships, non-containerized items like automobiles and perishable commodities like fresh food.

walkout could be the biggest national port disruption since 2002, when unionized dockworkers were locked out of 29 West Coast ports for 10 days because of a contract dispute.

The ports only reopened after President George W. Bush ordered an 80-day cooling-off period. Some economists estimated that each day of that lockout cost the U.S. economy $1 billion. It took months for the retail supply chain to fully recover.