Port workers suspend strike until January 15 to allow time to negotiate new contract

Some 45,000 dockworkers at East and Gulf Coast ports are returning to work after their union reached a deal to suspend a strike that could have caused shortages and higher prices if it had dragged on.

The International Longshoremen’s Association is suspending its three-day strike until January 15 to provide time to negotiate a new contract. The union and the US Maritime Alliance, which represents ports and shipping companies, said in a joint statement that they have reached a tentative agreement on wages.

A person briefed on the agreement said the ports sweetened their wage offer from about 50 per cent over six years to 62 per cent. The person didn’t want to be identified because the agreement is tentative. Any wage increase would have to be approved by union members as part of the ratification of a final contract.

Talks now turn to the automation of ports, which the unions says will lead to fewer jobs, and other sticking points.

Industry analysts have said that for every day of a port strike it takes four to six days to recover. But they said a short strike of a few days probably wouldn’t gum up the supply chain too badly.

The settlement pushes the strike and any potential shortages past the November presidential election, eliminating a potential liability for Vice President Kamala Harris, the Democratic nominee. It’s also a big plus for the Biden-Harris administration, which has billed itself as the most union-friendly in American history. Shortages could have driven up prices and reignited inflation.

The union went on strike early Tuesday after its contract expired in a dispute over pay and the automation of tasks at 36 ports stretching from Maine to Texas. The strike came at the peak of the holiday season at the ports, which handle about half the cargo from ships coming into and out of the United States.

Most retailers had stocked up or shipped items early in anticipation of the strike.

“With the grace of God, and the goodwill of neighbours, it’s gonna hold,” President Joe Biden told reporters Thursday night after the agreement.

In a statement later, Biden applauded both sides “for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding.”

Biden said that collective bargaining is “critical to building a stronger economy from the middle out and the bottom up.”

The union’s membership won’t need to vote on the temporary suspension of the strike. Until January 15, the workers will be covered under the old contract, which expired on September 30.

The union had been demanding a 77 per cent raise over six years, plus a complete ban on the use of automation at the ports, which members see as a threat to their jobs. Both sides also have been apart on the issues of pension contributions and the distribution of royalties paid on containers that are moved by workers.

Thomas Kohler, who teaches labour and employment law at Boston College, said the agreement to halt the strike means that the two sides are close to a final deal.

“I’m sure that if they weren’t going anywhere they wouldn’t have suspended (the strike),” he said. “They’ve got wages. They’ll work out the language on automation, and I’m sure that what this really means is it gives the parties time to sit down and get exactly the language they can both live with.”

ILA President Harold Daggett has been seeking an outright ban on anything that would cost human jobs.

Though automation typically eliminates some jobs, it also tends to create new ones, in part because equipment must be maintained and set up for different tasks, said Thomas Kochan, a professor at the Massachusetts Institute of Technology’s Institute for Work and Employment Research. The companies could agree to include such jobs in the union membership.

Shipping companies, he said, want more flexibility to automate at a faster pace, while workers want stronger job security language.

“I think the wage settlement will stick, and they’ll hopefully find language to allow automation to move forward but protect people most at risk from displacement,” he said.

Both the Maritime Alliance, which represents ports and shippers, and the ILA likely are talking about how to protect jobs, yet share in productivity gains from automation, Kochan said. Such gains would help ports compete against more efficient facilities that use more automation that will be built in Mexico or even Canada.

Workers, Kochan said, have legitimate fears about jobs being displaced by automation.

“There are ways to address those fears both by providing job security for those people who are displaced and also the ability then to take on the new jobs that are created,” he said. “That’s the sweet spot that I suspect they are trying to find in these final negotiations over automation.”

Just before the strike had begun, the Maritime Alliance said both sides had moved off their original wage offers, a tentative sign of progress.

Thursday’s deal came after Biden administration officials met with foreign-owned shipping companies before dawn on Zoom, according to a person briefed on the day’s events who asked not to be identified because the talks were private. The White House wanted to increase pressure to settle, emphasising the responsibility to reopen the ports to help with recovery from Hurricane Helene, the person said.

Acting Labour Secretary Julie Su told them she could get the union to the bargaining table to extend the contract if the carriers made a higher wage offer. Chief of Staff Jeff Zients told the carriers they had to make an offer by the end of the day so a man-made strike wouldn’t worsen a natural disaster, the person said.

By midday the Maritime Alliance members agreed to a large increase, bringing about the agreement, according to the person.

AP