International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) announced on Thursday (October 3) that they have reached a temporary agreement to extend the existing contract until January 15, allowing both labor and management sides time to negotiate a new contract.
This move will immediately halt the three-day strike that had caused a shutdown of shipping along the U.S. East Coast and Gulf of Mexico coastlines.
According to reports from U.S. media, sources revealed that the temporary agreement includes a 62% wage increase over a period of six years. Prior to this, the union had sought a 77% pay raise, while the management side had only increased the raise to nearly 50%.
The strike had disrupted the unloading of container ships from Maine to Texas, threatening the supply chain for fruits, automobiles, and other goods in the United States, leading to long lines of ships waiting outside ports to unload.
In a joint statement, both sides expressed that they will extend the existing contract until January 15, 2025, allowing a return to the negotiation table to address other unresolved issues.
The statement reads, “Effective immediately, all ongoing strike actions will cease, and all work covered under the master contract will resume.”
As of Wednesday, according to Everstream Analytics data, at least 45 container ships were unable to unload and were docked outside ports along the East Coast and Gulf of Mexico, compared to just 3 before the strike on Sunday.
Following the breakdown in negotiations for a new 6-year contract, the International Longshoremen’s Association initiated a strike by 45,000 port workers on Tuesday, marking the first large-scale strike by the union since 1977. The strike affected 36 ports including New York, Baltimore, and Houston.
The Biden administration supported the union, exerting pressure on management to raise wages to ensure an agreement was reached, pointing out that the shipping industry has been profitable since the COVID-19 pandemic began.
Economists suggest that the port shutdown initially may not lead to increased consumer prices as companies have sped up goods transport in recent months. However, a prolonged shutdown could ultimately have an impact, with experts indicating that food prices may rise first.
Tony Pelli, Global Practice Director for Security and Resilience in the Americas at BSI, stated, “A week after the strike, we can anticipate impacts on perishable products such as bananas, other fruits, seafood, and coffee, leading to reduced availability of goods reaching consumers and potentially driving price increases.”
(This article references relevant reports from Reuters, AP, and CNBC)