Tentative Agreement In Port Strike Averts Severe Economic Blow

A strike at U.S. East and Gulf Coast ports is over after three days, with both sides coming to a tentative agreement that could stave off major disruptions to the U.S. supply chain.

The International Longshoremen’s Association and the U.S. Maritime Alliance agreed to a 62% wage increase for dockworkers and port operators, Reuters reported. The agreement also extends the ILA’s master contract until Jan. 15, restarting work at the ports while final details are hammered out and union approval is secured.

"Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume," a joint statement from the organizations said. 

The strike began at midnight on Oct. 1 after the master contract expired and months of negotiations proved fruitless. Workers at 36 ports wrapping around the U.S. coast from Maine to Texas walked off the job.

The agreement and return to work in just a few days should keep impacts to the supply chain and broader U.S. economy to a minimum, according to a number of prestrike reports and papers. Supply chain experts at universities and consultancies across the country agreed that a short-lived strike could be absorbed by retailers.

An analysis by JPMorgan in the days leading up to the strike estimated the action could cost the U.S. economy roughly $5B per day, which would then be recouped when it ended, albeit at a slower pace.

The quick end to the strike also allowed President Joe Biden to avoid a thorny political decision. The famously pro-union president said earlier this week that he supported the workers’ demands for more money, stressing increased need for supplies after the devastating impacts of Hurricane Helene on the Southeast last week.

However, if the strike had continued, it is likely that calls would have grown for Biden to invoke the Taft-Hartley Act, which allows presidents to order striking workers back to their jobs.