East, Gulf Coast port strike suspended after tentative contract agreement
Striking dockworkers at 36 East and Gulf Coast ports are returning to their jobs.
Following an improved wage offer, a short-term contract extension have been reached between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), with ILA members agreeing to reopen ports along the East and Gulf Coast and restart contract negotiations. The two have extended their existing contract through Jan. 15 to provide time to negotiate a new contract.
The port operators have offered to increase wages by 62% over the course of a new six-year contract, reported the New York Times. The deal came after the White House had pressed both sides to reach an agreement to end the strike. It was estimated that the strike would cost the U.S. economy billions each day.
“The International Longshoremen’s Association (ILA) and the United States Maritime Alliance, Ltd. (USMX) have reached a tentative agreement on wages and have agreed to extend the Master Contract until Jan. 15, 2025, to return to the bargaining table to negotiate all other outstanding issues,” the ILA and the the USMX said in a joint press release. “Effective immediately, all current job actions will cease, and all work covered by the master contract will resume.”
Impact
According to an update on Friday morning from supply chain risk management platform Everstream Analytics, it will likely take a minimum of three weeks for U.S. ports to return to normal operations. The number of container ships waiting outside of Gulf and East Coast ports decreased over night to 54, down from the peak yesterday of 59.
"This is largely due to ships moving into the ports, especially in Savannah and Charleston, in anticipation of container terminals re-opening this morning," Everstream stated. "The queue outside the Port of New York-Newark has actually further grown since yesterday as ships are still waiting in the anchorage area."
Also, some shippers will now face the challenge of having to recover containers discharged at other ports outside of the U.S., for example, the Bahamas as carriers had to manage the situation, Everstream noted.
Retailers welcomed the news about the decision to end the strike.
“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,” stated Matthew Shay, president and CEO, National Retail Federation. “It is critically important that the International Longshoremen’s Association and United States Maritime Alliance work diligently and in good faith to reach a fair, final agreement before the extension expires.”
The Retail Industry Leaders Association (RILA) noted in a statement that “without the specter of disruption looming, the U.S. economy can continue on its path for growth and retailers can focus on delivering for consumers.”
“We encourage both parties to stay at the negotiating table until a final deal is reached that provides retailers and consumers full certainty that the East and Gulf Coast ports are reliable gateways for the flow of commerce,” RILA stated.
The White House released a statement from President Biden praising the move:
“Today’s tentative agreement on a record wage and an extension of the collective- bargaining process represents critical progress towards a strong contract. I congratulate the dockworkers from the ILA, who deserve a strong contract after sacrificing so much to keep our ports open during the pandemic. And I applaud the port operators and carriers who are members of the US Maritime Alliance for working hard and putting a strong offer on the table.”
