Strike settlement to reopen Los Angeles ports to normal freight traffic

* Labor dispute idled largest U.S. cargo shipping complex

for 8 days

* Work stoppage cost Southern California an estimated $8

billion

* Union officials hail terms reached on outsourcing of jobs

LOS ANGELES, Dec 5 (Reuters) - The United States' largest

cargo shipping complex was set to resume full operations on

Wednesday after harbor clerks and management settled an

eight-day strike that left the ports of Los Angeles and Long

Beach mostly idle, sapping the region's economy of an estimated

$8 billion.

The striking clerks reached a tentative contract deal with a

group of shippers and terminal operators late Tuesday, with

prodding from Los Angeles Mayor Antonio Villaraigosa, a onetime

labor activist.

Officials for the International Longshore and Warehouse

Workers Local 63 said the hundreds of clerical employees who

walked off the job Nov. 26, and the thousands of longshoremen

who had refused to cross their picket lines, would return to

work first thing Wednesday morning.

Federal mediators called upon to join negotiations at the

mayor's behest showed up at the waterfront community center

where talks were being held shortly before the mayor announced

the settlement.

"Today, the ILWU voted to approve the contract,"

Villaraigosa said, standing with smiling members of both

negotiating teams.

Union officials said they expected the rank and file, who

have been without a contract for more than two years, to ratify

the new agreement.

Details of the pact were not immediately made public. But

the mayor and ILWU representatives said the two sides had come

to terms on the union's chief concern - control over

outsourcing, or the transfer of jobs to workers elsewhere for

less pay.

What direct role, if any, the mediators played in clinching

the deal was unclear. But Villaraigosa said a key breakthrough

came when the union, which had resisted outside intervention,

joined management on Tuesday morning in consenting to mediation

as a way of spurring the stalled talks.

At that point, Villaraigosa told Reuters, "The employers

said, 'Why don't we just do this today,'" which led to the final

round of negotiations and a deal.

The union earlier credited the mayor with helping the

parties narrow their differences during a marathon bargaining

session the night before.

COSTLY STRIKE

The strike cost Southern California, a region still

struggling to recover from a prolonged economic slump, an

estimated $1 billion a day, including lost wages and the value

of cargo rerouted to other ports, the mayor said.

It marked the worst cargo traffic disruption at Los Angeles

and Long Beach - which together account for nearly 40 percent of

all U.S. container imports - since a 10-day lockout of

longshoremen at several West Coast ports in 2002.

The latest dispute forced a shutdown at 10 of the twin

ports' 14 container terminals, as some 10,000 longshoremen and

other union workers honored the picket lines of the 800-member

ILWU clerical workers unit.

Four other container terminals remained open, along with

facilities for handling shipments of automobiles, liquid fuels

and break-bulk cargo such as raw steel.

Still, at least 18 freighters bound for Los Angles and Long

Beach during the strike changed course to take their cargo to

ports in Northern California, Mexico and Panama, according to

the non-profit Maritime Exchange of Southern California. T h e

diverted cargo heightened concerns about the region losing

business to competing ports.

Many other cargo-laden vessels were forced to line up for

days at offshore anchorages, waiting to unload their containers.

The chief stumbling block throughout contract negotiations

was disagreement over future staffing levels and continued union

classification of jobs lost to retirement or other attrition.

Under the agreement, Villaraigosa told Reuters: "The

employers are not going to outsource."

Union spokesman Craig Merrilees said: "Really, it was

getting control on the outsourcing ... ensuring that the jobs

are here today, tomorrow and for the future."

Stephen Berry, chief negotiator for the Harbor Employers

Association, representing shippers and terminal operators at the

talks, hailed the settlement as "the end of a very long journey.

We're delighted with the terms. We'll be operating again and the

cargo will be flowing."

During the dispute, the employers had accused union

negotiators of seeking to "featherbed" the ranks of clerical

workers with more jobs than were necessary.

Unlike the labor clash at West Coast ports a decade ago,

which took place in the fall, the latest dispute unfolded after

the busy pre-holiday shipping season, limiting the scope of its

ripple effect.

Many major U.S. retailers said they were largely spared any

pain from the labor clash b ecause most of their Christmas

inventory had already made it to store shelves.

But the National Retail Federation asked President Barack

Obama last week to intervene, warning a prolonged strike could

have a "devastating impact on the U.S. economy."

The ports of Los Angeles and Long Beach together handled

more than $400 billion in goods arriving or leaving the West

Coast by ship last year. Experts say the ports directly or

indirectly support 1.2 million Southern California jobs -

workers involved in moving freight to or from the shipping

complex.

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