Last night, the U.S. port strike, which began on Tuesday, October 1st, came to a swift end after the parties reached a tentative agreement. The International Longshoremen’s Association (ILA) announced that it had reached a deal with the U.S. Maritime Alliance (USMX) on a tentative wage increase.
Ports are expected to reopen Friday.
Ports are expected to reopen Friday. Of course, there will be a lag in getting port operations fully back to normal and getting back into the routine of normalcy.
It is expected that there will be some delays in handling cargo as shipments are currently backlogged three days. Shippers should closely monitor the situation and work diligently to minimize any disruptions to their customers and their supply chains.
What are the specifics of the new labor deal reached by the parties?
The ILA had demanded a 77% wage increase as part of its previous demands. With this new tentative deal reached, there would be a 62% wage increase over the course of a new six-year contract. For each year, there would be essentially a $4 per hour raise. Currently, dockworkers are making up to $39 per hour.
The ILA’s current contract will be extended until January 15th in order to give the parties more time to finalize the agreement. Of course, like most union negotiations, the contract must ultimately be ratified by rank-and-file union members in order to go into effect.
The U.S. government ultimately intervened and assisted in the negotiations.
The deal was assisted and mediated by U.S. Secretary of Labor Julie Su who met with the parties throughout the week along with others such as White House Chief of Staff Jeffrey Zients, as well as Lael Brainard, Director of the National Economic Council. President Joe Biden had pledged to not invoke The Labor Management Relations Act of 1947, known as the Taft–Hartley Act, to end the strike. Ultimately, he did not need to.
President Biden said in a statement:
“Today’s tentative agreement on a record wage and an extension of the collective bargaining process represents critical progress towards a strong contract,” and added, “I congratulate the dockworkers from the ILA, who deserve a strong contract after sacrificing so much to keep our ports open during the pandemic. And I applaud the port operators and carriers who are members of the US Maritime Alliance for working hard and putting a strong offer on the table.”
All parties involved had incentives to end the strike swiftly as economic worries mounted and an economic slowdown was not off the table if the strike continued into next week.
