US dock workers end strike after 3 days, reach agreement to boost wages by 62%

Longshore workers in the United States have reached an agreement to end the work stoppage that halted shipping on the East Coast and Gulf Coast. The agreement includes a wage increase of approximately 62 percent over six years, with average wages rising from $39 per hour to around $63 per hour during the contract period, according to Reuters sources close to the situation.

This marks the resolution of one of the most significant work stoppages in nearly 50 years, which disrupted the unloading of container ships from Maine to Texas. The ILA started the strike involving 45,000 port workers on Tuesday after negotiations for a new six-year contract failed.

The International Longshoremen's Association (ILA) had initially sought a 77 per cent raise, while the United States Maritime Alliance (USMX) proposed almost a 50 per cent raise.

Both parties announced that they would extend their master contract until January 15, 2025, to address the remaining issues at the bargaining table. "Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume," they stated.

Due to the strike, there were shortages of items such as bananas and auto parts and a backlog of ships anchored outside major ports. By Wednesday, at least 45 container vessels were unable to unload and anchored outside affected ports, up from just three before the strike began on Sunday.

"After the first week, we can expect some impact on perishable products like bananas, other fruits, seafood, and coffee, meaning fewer goods are reaching consumers, potentially driving up prices," said Tony Pelli, global practice director for security and resilience at BSI Americas.

The strike impacted 36 ports, including New York, Baltimore, and Houston, which handle a variety of containerised goods. Economists suggested that the port closures would not immediately raise consumer prices due to accelerated shipments of key goods in recent months. However, a prolonged stoppage could eventually lead to higher food prices.

President Joe Biden's administration has supported the union, urging port employers to improve their offer and noting the shipping industry 's profits since the Covid-19 pandemic. "The tentative deal represents critical progress towards a strong contract," Biden said on Thursday.

The administration resisted calls from business groups and Republican lawmakers to use federal powers to end the strike, aiming to maintain union support ahead of the November 5 presidential election.