Initially, the mediator announced the extension would be 30 days, until Jan. 28. Later, the union and its bargaining opponent, the U.S. Maritime Alliance, said they had agreed to extend it even further, "in view of the year-end holiday season."
The terms of the royalty agreement were not announced.
The master contract between the International Longshoremen's Association and the Maritime Alliance originally expired in September. The two sides agreed to extend it once before, for 90 days, but it had been set to expire again at 12:01 a.m. Sunday.
As recently as Dec. 19, the president of the longshoremen, Harold Daggett, had said a strike was expected.
A work stoppage would have idled shipments of a vast number of consumer products, from electronics to clothing, and kept U.S. manufacturers from getting parts and raw materials delivered easily.
Business groups expressed relief that the two sides had agreed to keep the ports open.
"A coast-wide port shutdown is not an option. It would have severe economic ramifications for the local, national and even global economies and wreak havoc on the supply chain," said National Retail Federation President Matthew Shay.
Major ports that would have been frozen included the massive terminals serving New York City overseen by the Port Authority of New York and New Jersey, and critical seaports in Savannah, Ga., Houston, and Hampton Roads, Va.
New York Shipping Association President Joseph Curto said avoiding a strike is critical "to thousands of workers who depend on port activities for their livelihood."
Other ports that would have been affected by a strike are in Boston; the Philadelphia area; Baltimore; Wilmington, N.C.; Charleston, S.C.; Jacksonville, Fla.; Port Everglades, Fla.; Miami; Tampa, Fla.; Mobile, Ala.; and New Orleans. Reasons to care about the talks
The deadline • The contract expires Feb. 6 now that the two sides have agreed to a second contract extension. The White House has urged dockworkers and shipping companies to reach an agreement as quickly as possible.
Key issue • A key sticking point until it was resolved Friday was a proposal to freeze royalties workers get for every container they unload, which the union opposed.
Goods that would be affected • A range of items transported in containers on ships, including flat-screen TVs, sneakers and snow shovels.