The port strikes that began this week in the US – and which threaten to disrupt supply chains across the world – have been suspended until the start of next year.
The International Longshoremen’s Association (ILA) has reached an agreement with the United States Maritime Alliance (USMX) regarding wages, according to a joint statement.
45,000 ILA members had gone on strike after the expiry of a Master Contract on 1 October.
‘Tentative’ return
The ILA itself has called the agreement “tentative”, but noted that it has also agreed to “extend the Master Contract until January 15, 2025”, allowing the union to “return to the bargaining table to negotiate all other outstanding issues”.
These issues include automation and the protection of unionised jobs.
The agreement means that port workers will return to work today (4 October) until at least 15 January.
It curtails a three-day strike that was the first to affect ports on the US East Coast since the 1970s. The BBC notes that the expected wage offer to dockworkers is said to be a boost of 62% over the next six years.
Taft-Hartley
US President Joe Biden had come under pressure to use executive powers including the Taft-Hartley Act, which allows the president to mandate an 80-day window for further negotiations before a strike, to force striking workers to return to work. However, he had declined to use the powers.
Biden praised today’s decision, recognising the work of both workers and port operators:
“Today’s tentative agreement on a record wage and an extension of the collective bargaining process represents critical progress towards a strong contract.”
TradeWinds reported earlier this week that National Retail Federation chief executive Matthew Shay called on Biden to use “any and all authority” to bring the strikes to an end.
“A disruption of this scale during this pivotal moment in our nation’s economic recovery will have devastating consequences for American workers, their families and local communities.”
Counting the cost
Earlier this week, the Daily Update reported on the estimate from JPMorgan that the strikes could cost the US economy as much as US$5bn a day, with an effect on around half of all US exports at 36 different ports.
Northeastern University professor, and a former White House adviser on labour issues, Seth Harris suggested that if the strikes were to be cut short, then it was unlikely there would be “immediate, significant economic impacts”.
Instead, it would be over weeks of strikes that consumers would “begin to see prices rise and for there to be some shortages in goods”.
Chartered Institute of Export & International Trade director general Marco Forgione noted that the strikes could have compounded other recent supply chain shocks – including both longer-term issues such as the Red Sea crisis as well as unexpected incidents such as the Baltimore bridge collapse.
“What that disruption has meant is that the key retailers have brought forward their supply chain.
“There’s always normally a quiet period, but over the summer has been a really busy period of products being moved in advance of the potential strike, but also to deal with that ongoing instability and uncertainty in the global supply chain.”
