A massive strike across the U.S. East and Gulf Coast ports has been averted after a dockworker union and an alliance of companies, terminal operators, and port associations, negotiated a new labor contract.
The tentative six-year master agreement covering tens of thousands of dockworkers was announced Wednesday, just a day after negotiations between the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) were scheduled to resume. Workers were ready to hit the picket line on Jan. 15, when the current deal expires.
The swift action from both parties was praised by President Joe Biden, who said the deal “shows that labor and management can come together to benefit workers and their employers.” The walkouts were set to occur just a few days before Biden leaves office and President-elect Donald Trump returns to the Oval Office.
The ILA and USMX will continue working under the current deal — which initially expired in October but was extended to put an end to a brief strike that threatened to disrupt the economy — until the parties can hold their respective ratification votes.
Specific details of the proposed deal were not disclosed. Negotiators secured wage hikes of 62% in October as part of the agreement to end the ILA’s three-day strike, which closed down several major ports. The main issue on the table was automation, which the ILA says is a threat to its members’ jobs, and the UMSX argues is necessary to make ports more efficient and keep up with automated ports in countries like Dubai and Singapore.
“This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coasts ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong,” the ILA and USMX said in a joint statement, calling it a “win-win” for workers, their employers, and the U.S. economy.
During last fall’s walkouts, estimates of the potential damage to the global economy varied widely. Some forecast damages of as low as $540 million per day, while others went up to $5 billion per day, with as many as 100,000 jobs expected to be impacted. In September, about 180 trade associations representing companies across a series of industries warned a strike would be “devastating” to the U.S. economy.
“Providing certainty with a new contract and avoiding further disruptions is paramount to ensure retail goods arrive in a timely manner for consumers,” Jonathan Gold, the National Retail Federation’s vice president overseeing supply chains and customs, said in a statement.
Several carriers, including Hapag-Lloyd, ZIM (ZIM-4.46%), and CMA GCM, have warned clients about potential surcharges ahead of the negotiation deadline. With a strike removed from the equation, at least in the short term, those extra costs won’t be implemented.
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