US longshoremen and operators agree to immediately end strike on East Coast

NEW YORK/WASHINGTON, Oct 3 (Reuters) – U.S. longshoremen and port operators have reached a tentative agreement that will immediately end a crippling three-day strike that has brought shipping to a standstill on the U.S. East Coast and Gulf Coast, Both sides announced on Thursday.

The tentative agreement calls for a wage increase of about 62% over six years, two sources familiar with the matter told Reuters, including a worker on the picket line who heard the announcement. This would increase the average wage over the term of the contract from $39 per hour to approximately $63 per hour.

The International Longshoremen’s Association (ILA) union had sought a 77% increase, while the employers’ group – United States Maritime Alliance (USMX) – had previously raised its offer to a nearly 50% increase.

The deal ends the largest work stoppage of its kind in nearly half a century, which blocked the unloading of container ships from Maine to Texas and threatened shortages of everything from bananas to auto parts, leading to a backlog of ships anchored off major ports .

The union and port operators said in a statement that they would extend their framework agreement until January 15, 2025 in order to return to the bargaining table and negotiate all outstanding issues.

“With immediate effect, all current work activities will be suspended and all work covered by the framework agreement will resume,” the statement said.

Among the key issues that remain unresolved is automation, which workers say will lead to job losses.

U.S. President Joe Biden’s administration had sided with the union, pressuring port employers to increase their bid to secure a deal and citing the shipping industry’s record profits since the COVID-19 pandemic.

The tentative deal “represents critical progress toward a strong treaty,” Biden said Thursday. “Collective bargaining works,” he added.

Sources said the White House was heavily involved in talks to reach an agreement.

After days of talks, White House chief of staff Jeff Zients convened a virtual meeting with shipping company CEOs at 5:30 a.m. (09:30 GMT) on Thursday and emphasized to them the need to reopen ports to support efforts To speed hurricane recovery, a source briefed on the events said.

Senior White House economic adviser Lael Brainard told airlines at the meeting they needed a new offer to end the strike and urged them to put a new offer on the table. By midday, shippers had agreed to submit a new, higher offer.

Acting Labor Secretary Julie Su told trucking companies they could bring the union to the table and leaders would agree to a contract extension if the new offer was higher. According to the sources, she was in New Jersey to meet with union leaders and reach an agreement.

“Good News”

The ILA launched the strike by 45,000 port workers on Tuesday, the first major work stoppage since 1977, after talks over a new six-year contract failed.

As of Wednesday, at least 45 container ships that could not be unloaded were docked at strike-affected ports on the East and Gulf Coasts, up from just three before the strike began on Sunday, according to Everstream Analytics.

Analysts at JP Morgan said the strike would cost the U.S. economy around $5 billion a day.

The strike affected 36 ports – including New York, Baltimore and Houston – that handle a range of containerized goods.

“The decision to end the current strike and allow the reopening of East and Gulf Coast ports is good news for the country’s economy,” the National Retail Federation said in a statement. “The sooner they reach a (final) agreement, the better for all American families.”

Jay Timmons, CEO of the National Association of Manufacturers, said “cooler heads have prevailed and ports are reopening” and called it “a victory for everyone involved – preserving jobs, securing supply chains and preventing further economic disruption.” .”

Economists said the port closures would not initially increase consumer prices because companies have sped up shipments of essential goods in recent months. However, according to economists at Morgan Stanley, a prolonged shutdown would have taken hold at some point, with food prices likely to respond first.

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