East Coast Port Strike Suspended as ILA, USMX Agree on Wages; Retailers Rejoice
The dockworker strike across the East and Gulf Coast ports is over—for now.
The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are going back to work Friday after unveiling that they reached a tentative agreement on wages and agreed to extend their current master contract until Jan. 15, 2025.
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With the strike suspended effective immediately, the ILA and USMX will return to the bargaining table to negotiate all other outstanding issues until a formalized deal is reached.
Both parties made the joint announcement at 6:30 p.m.
Details of the agreement have not been disclosed. The tentative deal was struck less than a half hour after the Wall Street Journal reported that the port employers offered a 62 percent increase in wages over six years. This surpassed the 61.5 percent reported wage demand that the union had asked for earlier in the week.
Automation, a second major sticking point in the talks that also derailed the negotiations over the summer, remains up in the air.
ILA president Harold Daggett has been adamant that the union wants a total ban on the use of automated equipment at the ports.
For the new contract, the USMX had proposed to retain the current language around automation and semi-automation. Under those terms, the ports are not allowed to use fully automated terminals or equipment, with the technology defined as “machinery/equipment devoid of human interaction.”
That contract, which has been in effect since 2018, also requires that the terminals didn’t implement semi-automated equipment or technology “until both parties agree to workforce protections and staffing levels.”
Delaying the work stoppage would be a major win for the Biden administration and Democratic Presidential candidate Kamala Harris. Potential product shortages and lingering economic impacts of the strike will remain minimal, while the extension puts any possible strike past the presidential election.
In line with the Biden administration’s pro-union posturing, the White House publicly took the side of the ILA in the negotiations, pressuring the USMX and its membership of foreign-owned ocean carriers and cargo terminal operators to “present a fair offer” to the union.
And since President Biden did not have to invoke the Taft-Hartley Act to force the ILA back to work to hammer out a new contract, the administration and by proxy, Vice President Harris, don’t risk alienating union members across the U.S. by intervening.
The White House is scheduled to host a briefing Friday morning on the port strike.
Retailers—many of whom had already prepared for the strike by either diverting their cargo to the West Coast ports or pulling their orders forward—are happy with the move, especially given the proximity to the holiday season.
“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,” said Matthew Shay, president and CEO of the National Retail Federation (NRF), in a statement. “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 sooner they reach a deal, the better for all American families.”
Joining the NRF in breathing a sigh of relief was the Retail Industry Leaders Association (RILA).
“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,” RILA said in a statement. “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.
With the extension, container vessels will finally be able to clear a backlog that had formed outside the ports since Monday. According to data from Everstream Analytics as of 4 p.m., there were 59 vessels waiting at nine major East and Gulf Coast ports, up from 54 Thursday morning and 45 on Wednesday.
“Currently, there are over 400,000 twenty foot-equivalent units (TEUs) being carried on the queued vessels outside the affected East and Gulf Coast ports, another 33 percent increase from yesterday and a 170 percent jump from the day before the strike began,” said Jena Santoro, senior manager of intelligence solutions at Everstream Analytics.
The end of the strike also came the same day that longshoremen at two terminals at the Port of Montreal returned to work after their own three-day stoppage, which lasted Monday through Thursday.
The port said cargo can again be picked up and dropped off as usual. However, it also warned clients of delays to imports and exports in the coming weeks to as containers that accumulated on the ground or were awaiting handling.
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