The ILA and the USMX have reached a tentative agreement on royalty payments, the key issue between the two sides that for months has stymied efforts to finalize a new contract. The deal has resulted in an extension of the existing contract until January 28, 2013 at midnight while the parties work with federal mediators to resolve the balance of the concerns on both sides.

The contract extension averted a strike that would have shut down East and Gulf Coast ports for the first time in 35 years.

George Cohen, director of the mediation service, said in a statement, "The agreement on this important subject represents a major positive step toward achieving an overall collective bargaining agreement. While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period."

While importers and exporters were pleased to learn that their cargo will continue to move, many are frustrated with the challenges that are presented by the continued threat of labor action at the ports. The new January 28 contract expiration date also looms dangerously close to the peak Chinese New Year shipping season.

Liberty will continue to keep you advised as more information becomes available.