For now, prolonged port strike narrowly avoided

The United States avoided serious economic consequences after the International Longshoremen’s Association (ILA) and the United States Maritime Union (USMX) reached an agreement last Friday (October 4). The strike lasted 72 hours and the atmosphere was tense, but the damage was contained as most shippers had made contingency plans in advance.

Also read: US East Coast dockworkers strike – key insights from container traders and leasing companies

USMX reached a settlement that agreed to a $4 hourly pay increase for all union members, and an additional $4 an hour every year thereafter. The contract is for six years, so each member will receive a total of $24 per hour over the life of the contract.

The ILA, which represents some 50,000 members, has a colorful figure at the forefront of the highly publicized controversy. Union boss Harold Daggett has been outspoken from the start, the first strike since 1977, after USMX countered the ILA’s $4 proposal with a $3-an-hour pay increase.

Meanwhile, anchored ships can be seen from Maine to Texas, and everyone is breathing a sigh of relief, awaiting a swift conclusion. ILA members were not compensated during the strike and suffered an increasing loss of income as a result. While workers returned to work on Friday, experts have long believed that for every day the port is closed, it takes nearly three to five days to recover from the resulting bottleneck.

It is not uncommon for ports to be shut down for three days. Weather delays are common across the world, with Hurricane Helene closing several ports in the southeast ahead of the strike. The Port Authority of New York and New Jersey estimates daily losses at $250-300 million. Counting Friday, it was also a lost day for many ports, with the price of forgone economic activity rising by $1 billion in some ports.

As of Friday the 4th, there were 24 ships anchored in the Port of New York and New Jersey, eagerly waiting to enter the port. This totals approximately 35,000 import containers, with another 35,000 containers arriving soon. The port handles an average of up to 400,000 containers per month.

Last month, Boeing and the International Association of Machinists reached an agreement that union members publicly supported. However, the deal was unanimously rejected as soon as it was voted on, and members have been on strike since September 13. While this is unlikely to happen with the ILA/USMX agreement, the agreement must now be voted on and ratified. If it gets knocked down, the impending strike could unfortunately happen again.