U.S. dockworkers and port operators have reached a tentative deal that will immediately end a crippling three-day strike that has shut down shipping on the U.S. East Coast and Gulf Coast, the two sides said in a statement on Thursday.
The tentative agreement is for a wage hike of around 62% over six years, two sources familiar with the matter told Reuters, including a worker on the picket line who heard the announcement. That would raise average wages to about $63 an hour from $39 an hour over the life of the contract.
The International Longshoremen’s Association (ILA) workers union had been seeking a 77% raise while the employer group – United States Maritime Alliance (USMX) – had previously raised its offer to a nearly 50% 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.
Both sides said in a statement that they would extend their master contract until January 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,” the statement said.
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.
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.
U.S. 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.
The strike affected 36 ports – including New York, Baltimore, and Houston – that handle a range of containerized goods.
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.
“After the first week, we can expect some impact on perishable products like bananas, other fruits, seafood, and coffee, meaning fewer goods are reaching consumers, potentially driving up prices,” said Tony Pelli, global practice director for security & resilience at BSI Americas. (Reuters)