US DOCK workers and port operators have reached a tentative deal that will immediately end a crippling three-day strike that has shut down shipping on the US East Coast and Gulf Coast, the two sides said on Thursday (Oct 3).
The tentative agreement is for a wage hike of around 62 per cent over six years, two sources familiar with the matter said, including a worker on the picket line who heard the announcement. That would raise average wages to about US$63 an hour from US$39 an hour over the life of the contract.
The International Longshoremen’s Association (ILA) workers union had been seeking a 77 per cent raise while the employer group – United States Maritime Alliance (USMX) – had previously raised its offer to a nearly 50 per cent hike.
The deal ends the biggest work stoppage of its kind in nearly half a century, which blocked the unloading of container ships from Maine to Texas and threatened shortages of everything from bananas to auto parts, triggering a backlog of anchored ships outside major ports.
The union and the port operators said that they would extend their master contract until Jan 15, 2025, to return to the bargaining table to negotiate all outstanding issues.
“Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume,” they said.
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Among the key issues that remain unresolved is automation that workers say will lead to job losses.
Union boss Harold Daggett said previously that employers such as container ship operator Maersk and its APM Terminals North America had not agreed to demands to stop port automation projects that threaten jobs.
US President Joe Biden’s administration has sided with the union, putting pressure on the port employers to raise their offer to secure a deal and citing the shipping industry’s bumper profits since the Covid-19 pandemic.
The tentative deal “represents critical progress towards a strong contract”, Biden said on Thursday.
His administration has repeatedly resisted calls from business trade groups and Republican lawmakers to use federal powers to halt the strike – a move that would undermine Democratic support among unions ahead of the Nov 5 presidential election.
Acting Secretary of Labor Julie Su was in New Jersey all day with the two parties working to get a deal done, a source said.
‘Good news’
The ILA launched the strike by 45,000 port workers, its first major work stoppage since 1977, on Tuesday after talks for a new six-year contract broke down.
At least 45 container vessels that have been unable to unload were anchored outside the strike-hit East Coast and Gulf Coast ports by Wednesday, up from just three before the strike began on Sunday, according to Everstream Analytics.
JP Morgan analysts have said the strike would cost the US economy around US$5 billion per day.
The strike affected 36 ports – including New York, Baltimore and Houston – that handle a range of containerised goods.
“The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy,” National Retail Federation said. “The sooner they reach a (final) deal, the better for all American families.”
Economists have said the port closures would not initially raise consumer prices because companies had accelerated shipments in recent months of key goods. However, a prolonged stoppage would have eventually filtered through, with food prices likely to react first, according to Morgan Stanley economists. REUTERS
