The International Longshoremen’s Association (ILA) agreed on Thursday, October 3, to suspend a strike that closed the major ports on the East and Gulf Coasts following an improved wage offer from port employers.
In a joint statement on the evening of October 3, the ILA, the union representing striking U.S. dockworkers at East and Gulf Coast ports, and the United States Maritime Alliance (USMX), the shipping industry group representing terminal operators and ocean carriers, announced they had reached a tentative agreement on wages and extended the group’s “Master Contract” until January 15, 2025, when they will return to the bargaining table to negotiate all other outstanding issues.
“Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume,” the ILA and USMX said jointly.
Members of the ILA walked out on Tuesday, October 1, at 14 major ports on the East and Gulf coasts, halting container traffic from Maine to Texas. With roughly half of U.S. commerce flowing through those ports, a prolonged strike would have disrupted supply chains during the critical holiday season and have weighed on the economy five weeks before the presidential elections.
The agreement came after the White House pressed both sides to reach a deal to end the strike, the union’s first full-scale walkout since 1977. Negotiations between the ILA and USMX have been deadlocked since June.
According to reports, employers represented by the United States Maritime Alliance, offered to increase wages by 62 percent over a new six-year contract. The employer group initially offered a raise of around 40 percent over the life of the contract, while the union sought 77 percent. The Alliance then increased its offer to nearly 50 percent before both sides agreed to 62 percent, which raises top longshoremen’s wages to just over $63 per hour at the end of a new six-year contract from the $39 per hour currently. At $63 an hour, the wages of East and Gulf Coast longshoremen would slightly exceed those earned by West Coast longshoremen, who belong to a different union, at the end of their contract in 2027.
The union is also seeking a ban on increased automation of port cranes, gates, and trucks, which could cost jobs, a share of container royalties, and improved retirement benefits.
Another potential sticking point is the pay of longshoremen who are just beginning their careers and do not earn the top wage rate. In the resumed talks, these issues could still divide the sides.
Retailers no longer see the critical Holiday selling period as impacted by freight brought in earlier or diverted to the West Coast. The West Coast ports, which remained open during the strike, were getting close to capacity and would not have been able to absorb more cargo diverted from East Coast ports.
Around three-fifths of annual container trade goes through the East and Gulf Coast ports, including the Port of New York and New Jersey, the third busiest in the country, and fast-growing ports in Virginia, Georgia and Texas.
As businesses grew more concerned about the dock strike’s economic impact, they pressed President Biden to use the 1947 Taft-Hartley Act to force the longshoremen back to work, but throughout the dispute, he encouraged both sides to continue bargaining to reach a deal.
“I want to applaud the International Longshoremen’s Association (ILA) and the United States Maritime Alliance for coming together to reopen the East Coast and Gulf ports. Today’s tentative agreement on a record wage and an extension of the collective bargaining process represents critical progress towards a strong contract,” the President said. “I want to thank the union workers, the carriers and the port operators for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding. Collective bargaining works and it is critical to building a stronger economy from the middle out and the bottom up,” he continued.
In response to the strike ending, the National Retail Federation’s (NRF) President and CEO Matthew Shay said, “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. 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.”
On Wednesday, October 2, the NRF led a coalition of nearly 300 industry trade associations in sending a letter to President Biden calling on him to use “any and all authority,” including the 1947 Taft-Hartley Act, to end the strike.
The Retail Industry Leaders Association (RILA) stated, “The retail industry is relieved to see positive progress in the ILA and USMX contract negotiations that ensures the vital East and Gulf Coast ports are open and fully operational.
“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,” continued RILA.
Image courtesy EPA
