It took only three days for one side to blink and the potentially crippling strike at the United States’ East and Gulf Coast ports to come to an end, with likely only limited damage to America’s economy.
Members of the International Longshoremen’s Association, the union representing 50,000 members covered under the contract with the United States Maritime Alliance, were back on the job early Friday after the two sides reached an agreement on the key dispute in the strike that started early Tuesday – the scale of wage increases.
The work stoppage had threatened to disrupt supply chains, causing shortages of some consumer goods and supplies needed to keep US factories running. It also temporarily cut off the flow of many American exports, putting overseas sales at risk for some US businesses.
But relatively little damage was done, with the strike lasting only three days, especially since many shippers had rushed to move their goods through the ports ahead of the 12:01 am Tuesday start of the strike, a deadline that had been known for months.
What’s in the deal
The maritime alliance, which operates under the acronym USMX, agreed to raises of $4 an hour for the union members on top of the current base pay of $39 an hour, an immediate raise of just more than 10%, according to a person familiar with the deal. Then union members will get additional $4-per-hour raises every year during the life of the six-year tentative deal. That will raise pay by a total of $24 an hour during the life of the contract, or by 62% in total.
The union had been willing to consider the $4-an-hour deal before the strike, union boss Harold Daggett said on the picket line outside the Port of New York and New Jersey early Tuesday, soon after the start of the strike. But when the company countered with a $3-an-hour offer, he rejected it with colorful language and took his members out on their first strike since 1977.
But Thursday the USMX agreed to up its offer, and the strike came to a quick conclusion.
Once there was an agreement on wages, both sides were eager to get workers back on the job as soon as possible, even if there is still more to be done on the rest of the contract.
There were ships anchored offshore waiting to come into ports from Maine to Texas, in order to load and unload goods. The workers, who were not getting paid and did not have any strike benefits available to them from the union during the strike, were eager to limit their loss of income. So it only made sense for both sides to have the strike suspended and the previous contract extended to January 15 as the sides negotiated the remaining details.
A return to normal will take days
But it will still take a while for the flow of goods to return to normal. Ahead of the strike various logistics experts had said it would take three to five days to recover from any one day the ports were shut.
For example, the Port of New York and New Jersey, the largest port that was affected and the nation’s third-largest port by cargo volume, as well as the Port of Virginia both announced to shippers that their gates would remain closed to trucks Friday as the two ports work to get containers positioned to move around their grounds as soon as possible.
Typically containers can be loaded directly from ships onto trucks, but they are also often stacked on port grounds waiting to be picked up and moved. Trucks will be allowed in the gates starting Saturday. Other ports are looking to add weekend hours to try to deal with the backlog.
Of course, a three-day shutdown is not uncommon, even if this is the first strike in nearly a half-century. Extreme weather can also cause shutdowns. In fact, several of the struck ports in the Southeast had been shut ahead of the strike due to Hurricane Helene.
Despite talk of the strike affecting hurricane recovery efforts, there was almost no impact on the flow of emergency supplies to storm victims. All of the ships calling on those ports are foreign-owned vessels coming from overseas ports. Under well-established US maritime law, those ships are not allowed to transport goods from one US port to another.
How much were the losses?
The Port Authority of New York and New Jersey lost between $250-300 million dollars a day during the strike by members of the International Longshoremen’s Association, said Bethann Rooney, the port’s director, Friday.
The unloading of containers from ships will resume at 7pm ET this evening, so the port will have seen four days of inactivity. That’s about $1 billion in economic losses to a single port.
There are currently 24 ships at anchor waiting to get into the Port of New York and New Jersey to unload as of Friday morning. They include four car ships, one specialty ship, and 19 container ships carrying 35,000 import containers with all types of consumer goods.
There are an additional 35,000 containers on inbound ships to the port. The port on average receives 400,000 containers a month.
It is not unusual for a port to be closed for 2-3 days because of storms. The Port of NY/NJ was closed for five days or longer during Hurricane Sandy and 9/11, and was “able to recover very quickly,” said Rooney.
Could the strike return?
Thursday’s deal likely is the end of the strike, but it doesn’t close the door on a new strike in the future. The final language in the full contract, when it is completed, will need to be ratified by the union’s rank-and-file members before it can take effect.
Should the members vote against the deal, the strike might start once again. And such a rejection of a tentative labor deal is not unheard of.
Just last month, the International Association of Machinists and jet maker Boeing (BA) reached a tentative deal, which union leaders recommended their 33,000 members accept. The leadership even described it as the best deal they had ever negotiated with the company. But union members voted nearly unanimously to reject it and have remained on strike since September 13.
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