10/04 – National News Story & Update

U.S. dock workers and port operators have reached a tentative agreement, bringing an immediate end to a three-day strike that had paralyzed shipping along the U.S. East Coast and Gulf Coast, both sides announced on Thursday October 3.

The proposed deal includes a wage increase of about 62% over six years, according to sources familiar with the negotiations, including a picketing worker who heard the announcement. This would boost average wages from $39 an hour to around $63 an hour over the course of the contract. The International Longshoremen’s Association (ILA) initially sought a 77% raise, while the United States Maritime Alliance (USMX) had previously offered a nearly 50% increase. [Reuters] 

This agreement concludes the largest work stoppage of its kind in nearly 50 years, which had halted the unloading of container ships from Maine to Texas, creating supply shortages for goods ranging from bananas to auto parts and causing a backlog of anchored ships at major ports. Both the union and the port operators confirmed in a joint statement that the master contract will be extended until January 15, 2025, allowing time to negotiate any remaining issues.

One unresolved issue remains the automation of ports, which workers fear will result in job losses. Union leader Harold Daggett has previously expressed concern that companies like container ship operator Maersk and its APM Terminals North America have not committed to halting automation projects that could threaten jobs.

President Joe Biden’s administration has supported the union, urging port employers to raise their wage offer, citing the significant profits made by the shipping industry since the COVID-19 pandemic. In response to the tentative agreement, Biden stated that the deal “represents critical progress toward a strong contract” and added, “Collective bargaining works.”

The Biden administration had resisted pressure from business groups and Republican lawmakers to use federal authority to intervene and stop the strike, a move that would risk alienating union support ahead of the upcoming November presidential election. 

The White House was heavily involved in negotiations, with Chief of Staff Jeff Zients leading a virtual meeting early Thursday morning with ocean carrier CEOs, urging them to reopen the ports to expedite recovery efforts following a recent hurricane in the southeastern U.S.

The ILA’s strike, which involved 45,000 port workers and was the first major work stoppage since 1977, started after negotiations for a new six-year contract fell apart. By Wednesday, 45 container vessels were anchored outside affected ports, up from just three before the strike began on Sunday, according to Everstream Analytics.

Economists from JP Morgan estimated the strike was costing the U.S. economy around $5 billion a day. The disruption impacted 36 ports, including major hubs such as New York, Baltimore, and Houston, which handle a variety of containerized goods. [Reuters] 

The decision to end the strike has been welcomed by industry leaders. The National Retail Federation said reopening the ports is “good news for the nation’s economy,” while National Association of Manufacturers CEO Jay Timmons called it “a victory for all parties involved,” as it helps safeguard jobs, protect supply chains, and prevent further economic disruptions.

While economists indicated that the strike would not have immediately affected consumer prices due to stockpiled goods, a prolonged stoppage could have driven up prices, with food costs likely being impacted first.