Imminent Threat of Labor Unrest Averted at US Northwest Ports

Shipping exports
Ariana Lindquist | Bloomberg | Getty Images

The threat of imminent labor unrest at four U.S. Pacific Northwest ports was averted on Wednesday as the dockworkers union said its members would stay on the job despite "substandard" contract terms being imposed unilaterally by grain shippers.

Both sides in the stalemate left open the door to further negotiations. A spokesman for the U.S. Federal Mediation and Conciliation Service told Reuters the agency was in contact on Wednesday with the parties.

The shipping companies declared a formal impasse in stalled contract talks with the International Longshore and Warehouse Union (ILWU) days after nearly 3,000 rank-and-file union members voted overwhelmingly to reject management's "last, best and final" offer.

The contracts at issue cover workers at six of the nine grain terminals operating in Puget Sound and along the Columbia River that handle more than a quarter of all U.S. grain exports and nearly half of U.S. wheat exports.

In calling an impasse after a last, brief round of talks on Wednesday, the shipping companies also said they planned to implement terms of their latest proposal, effective at 6 a.m. local time on Thursday.

The Pacific Northwest Grain Handlers Association, which represents the shipping companies and grain terminals they own, stressed the move was not the "lockout" that was widely expected after management's proposal failed to win union agreement.

(Read more: Shipping Industry Going Through Rough Seas)

Under a lockout, employers typically bar union members from returning to work, and seek to keep operations running with non-union replacement workers, until a settlement is reached.

Speculation that grain shippers might take such action was fueled by union reports that the companies had hired a Delaware-based company that specializes in providing security and replacement workers in labor disputes.

The U.S. Coast Guard said in recent days it was prepared to establish "buffer zones" to keep union-related protests from interfering with navigation around two of the ports seen as most likely to be caught up in labor tensions.

"This is not a lockout," association spokesman Pat McCormick said in a statement. "The companies informed the union that ILWU members are welcome to come to work under the new terms and conditions of employment."

Staying On The Job Under 'Substandard' Terms

The companies said that under an impasse, the union essentially had three choices - to acquiesce and accept management's terms, to call a strike, or to have their members continue to report to work under the imposed work rules "but seek further bargaining."

In a brief statement released shortly after the impasse was declared the union said it was following the third course, at least for now.

The Northwest Grain Handlers left open the possibility of imposing a "defensive" lockout should the union begin to engage in "intermittent strike activity," a "partial strike," work slowdowns or sabotage.

Negotiations have stalemated over numerous work-rule changes sought by the companies to improve efficiency and lower costs but have been opposed by the ILWU as onerous give-backs ultimately designed to break the union.

Meanwhile, some 15 container cargo ports on the U.S. Atlantic and Gulf coasts are bracing for a strike threatened on December 30 by nearly 15,000 union dockworkers unless shippers extend their contract.

(Read more: 'Container Cliff': US Faces 'Devastating' Port Strike)

So far, the ILWU has not asked its members to authorize a strike, nor has it set a strike deadline or made mention of a walkout.