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From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish. A strike has been averted at many of the nation's busiest shipping ports, at least temporarily. The union representing longshoremen at ports along the East Coast and the Gulf of Mexico have threatened to walk off the job starting Sunday. But as we hear from NPR's Jim Zarroli, port operators and the union have reached agreement on one of their most contentious issues.
JIM ZARROLI, BYLINE: A strike would have crippled cargo operations from Maine to Texas, in Boston, New York, Norfolk, Mobile, Houston and points in between. It would have choked off the flood of cars, consumer goods, food, electronics and clothing coming into the country. So when news came out about today's agreement, a sigh of relief broke out in much of the country. Juan Kuryla, deputy director of the port of Miami, says a strike would have been felt all over Florida and beyond.
JUAN KURYLA: We are extremely pleased that this extension has been agreed to. Any strike would have meant for us a really devastating financial impact.
ZARROLI: The agreement reached today doesn't completely rule out a strike. The two sides merely agreed to keep talking until February 6th. But federal mediators said they had resolved what was widely seen as the biggest sticking point. For several decades, shipping companies have been required to pay royalties to the International Longshoremen's Association, the union representing more than 14,000 port workers.
The money is supposed to compensate the workers for the pay they've lost over the years as a result of port automation. Richard Hurd, professor of labor relations at Cornell University, says this year, shipping companies had tried to end the royalty system and the union refused to go along.
RICHARD HURD: So from the union's standpoint, you have this issue that's a real important matter of principle that they're going to retain the royalty payments based on weight. Because if they give those up, then essentially, that puts the companies in control of the docks totally.
ZARROLI: Today federal mediators said the two sides had reached an agreement over the royalties, although they wouldn't provide any details about what it contains. The resolution means the two sides are much more likely to come up with a contract they can agree on. They have been under growing pressure to resolve their differences in recent days. Earlier this month, a strike shut down ports in southern California for eight days.
Meanwhile, East Coast ports are still reeling from the impact of Hurricane Sandy. Retailers had warned that a strike would devastate a lot of stores. Steve Lamar, executive vice president of the American Apparel and Footwear Association, says many retailers are now restocking their shelves after the holiday and a strike would have made that a lot more difficult.
STEVE LAMAR: There's probably no good time for a strike, but I think at the end of the year, this would have been especially troubling.
ZARROLI: In other ways, too, the timing of the strike would have been especially painful. Much of the country is preoccupied by the fiscal cliff and the potential impact on the economy of massive spending cuts and tax hikes. A strike would have been one more burden for the U.S. economy to contend with at a time when it can't afford to do so. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.