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Obama administration moves to end port dispute

U.S. Labor Secretary Tom Perez is expected to be in San Francisco on Tuesday to help resolve a labor dispute affecting major shipping ports along the West Coast.

At issue are contentious talks between the Pacific Maritime Association (PMA), which represents shipping companies, and the International Longshore and Warehouse Union (ILWU), consisting of dockworkers who unload those cargo vessels.

The contract between the two sides expired in early July, and mounting frustration over the lack of progress in the negotiations has led to accusations of work slowdowns by union members and worker lock-outs at some ports.

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In the meantime, cargo ships carrying a wide variety of goods -- from electronics to fresh fruit -- have been forced to idle in the waters outside many key West Coast ports. Those 29 terminals handle close to one-quarter of America's overseas trade, or around $1 trillion of cargo each year.

In recent weeks, as the labor dispute worsened, industry representatives called on the White House to become more involved.

"We hear daily from retailers whose deliveries are delayed, manufacturers whose production lines are in danger of shutting down, and farmers whose products are rotting because they can't get to the port for export, thereby missing opportunities in foreign markets," National Retail Federation President and CEO Matthew Shay said in an op-ed piece late last month.

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"It's time for President Obama to take the first step toward following through on his call for modern ports by encouraging the completion of the West Coast port negotiations."

In the interim, data collected by Thomson Reuters shows shipping freight rates are rising, as the delayed cargo ships wait to unload and are unavailable for additional assignments.

Some major East Coast terminals have already benefitted from the months-long West Coast labor dispute. The Journal of Commerce, quoting industry data, says port congestion along the U.S. Pacific Coast diverted an estimated 150,000 shipping containers of cargo to eastern seaboard ports last year.

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