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A strike that closed US east and Gulf coast ports will be suspended after the dockworkers’ union and the group representing ocean carriers reached an agreement on Thursday, averting for now a costly blow to the economy ahead of the presidential election.
The agreement extends the International Longshoremen’s Association’s employment contract, which had expired, until January 15, allowing them to return to work, the union and the shipping lines’ group said in a joint statement.
Negotiations, which had been at an “impasse” over wages and automation for months, would now continue, the statement added.
The work stoppage, which started on Tuesday, had threatened to upend the US economy by snarling global supply chains and halting imports of fresh foods, pharmaceuticals and other consumer goods. JPMorgan analysts estimated that it could cost the US economy as much as $4.5bn a day.
The three dozen affected ports stretch from Maine to Texas and together handle one-quarter of the country’s annual international trade, worth $3tn, according to a Conference Board analysis.
US President Joe Biden congratulated the union and the United States Maritime Alliance (USMX), which represents the carriers, on the deal, saying in a statement that it “represents critical progress towards a strong contract”.
The ending of the strike hit shares in the world’s largest shipping companies, with those in AP Møller-Maersk falling 7 per cent and Hapag-Lloyd down 12 per cent. Investors had anticipated that a prolonged strike would drive up freight rates.
Frustration over the economic fallout of the strike, compounded by fears of product shortages delaying relief efforts for states devastated by Hurricane Helene, had opened up a new line of attack on Biden and vice-president Kamala Harris, the Democratic candidate, ahead of the November 5 election.
Donald Trump, the former president and Republican nominee, claimed earlier this week the work stoppage “would never have happened” had he been in the White House.
In a statement on Thursday, Harris praised the union and carriers’ group for coming to a temporary deal, which she said “represents the power of collective bargaining”.
“This is about fairness — and our economy works best when workers share in record profits,” she said.
Business leaders also criticised Biden’s approach to the strike, repeatedly asking him to invoke a federal law that would temporarily force the longshoremen to resume loading and unloading container ships. Biden said he wanted the groups to come to an agreement on their own.
A coalition of 272 trade groups representing retailers, farmers, restaurants, meat processors, truckers and other industries had called the work stoppage a “dire situation” on Wednesday, with “massive negative ramifications for our industries and the economy”.
It threatened the importation of consumer items from bananas to coffee to clothing. Some Americans even began panic buying and hoarding toilet paper, prompting a trade group that represents paper manufacturers to issue a statement saying it did not expect the strike to have an impact on supply. An estimated 85 per cent of such products were manufactured in the US, the American Forest and Paper Association said.
ILA leaders told picketing workers the deal included a 62 per cent raise over the course of a new six-year contract. ILA members earned between $20-$39 an hour under the old contract, with overtime pay that pushed a third of New York-based workers’ annual earnings above $200,000 during fiscal year 2019-2020.
IThey are also fighting against the adoption of port robotics that they say could eliminate jobs. Ports in the Netherlands and Australia are already primarily operated by remote-controlled cranes, employing few human workers.
