US dockworkers agreed to end a three-day strike that had paralyzed trade on the US east and Gulf coasts and threatened to become a factor in the presidential election.
The International Longshoremen’s Association (ILA) and the US Maritime Association extended their previous contract through Jan. 15, the two groups said in a joint statement on Thursday. Work was set to resume yesterday morning. The two sides would also restart negotiations on a long-term agreement, which would include a pay increase of about 62 percent.
Fears of a sustained emergency swelled through the week, with analysts and industry officials warning that the disruption would quickly extend beyond the containerized imports, exports and autos impacted directly by the walkout. Estimates of the cost to the US economy ranged from US$3 billion to US$5 billion per day.
Photo: Bloomberg
“The strike is over,” ILA Local 333 president Scott Cowan told a CBS affiliate just after delivering the news to members gathered at the picket line outside the Port of Baltimore.
The agreement gives the ILA and USMX — as the group of terminal operators and shipping liners is known — time to resolve even more contentious issues without threatening the US economy just weeks ahead of the election. Shares of shipping lines in Asia fell as the suspension of the strike damped expectations that container rates would rise due to reduced capacity.
“We’re going to receive a 61.5 percent increase over the next six years and we’re going to have other language to protect us from automation worked out over the next few months, and other issues that we need resolved,” Cowan said.
Americans started to panic over potential shortages. Some anxious shoppers stocked up on goods, especially in areas affected by Hurricane Helene, which hit several southeastern states with flooding and power outages. One national grocery store chain set purchase limits on paper towels, toilet paper and water, adding to pressure on US President Joe Biden to intervene.
The deal neutralizes a potential political issue for the White House and the campaign of US Vice President Kamala Harris. A prolonged strike would have forced her to confront a crisis that fueled inflation.
It also spares Biden from having to put any public pressure on the ILA as he and Harris fight the Republican Party’s nominee, former US president Donald Trump, for the support of rank and file union members.
A deal, even a temporary one, means Biden would not have to decide whether to bear the political burden of a crippling strike or distance himself from the demands of the union.
Even though the strike lasted just three days, the cargo backlog is likely to take more than a month to clear, according to project44, a supply chain data company in Chicago. Port terminals began battening down the hatches days ahead and it would take them a while to fully reopen.
In the meantime, dozens of ships carrying containers and autos are anchored off the coast of major trade hubs in New York, South Carolina and Virginia, and would continue arriving faster than they can be unloaded.
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