After three days of strikes in several ports on the east coast of the United States, raising the threat of shortages and price increases, American dockworkers will quickly return to work thanks to the signing of an agreement on Thursday, October 3.
The longshoremen’s union (ILA) and the United States Maritime Alliance (USMX), which represents their employers, “reached an agreement in principle on salaries and agreed to extend the framework agreement until January 15, 2025 in order to return to the bargaining table to negotiate all other outstanding issues”said a joint press release.
So, “from now on, all ongoing actions will cease and all positions covered by the framework agreement will resume”it is specified. The two parties will therefore have to meet again to discuss between now and January.
The press release does not provide details on the terms of the salary agreement. But, according to the Wall Street Journal which cites people familiar with the matter, employers have proposed a 62% wage increase over six years.
The agreement actually only concerns 25,000 union members working in the container and vehicle import/export terminals of fourteen major ports (including Boston, New York, Philadelphia, Baltimore, Savannah, Miami, Tampa, Houston).
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Joe Biden welcomes the agreement
The American President, Joe Biden, welcomed this agreement which will make it possible to “reopen East Coast and Gulf ports [du Mexique] »and who “represents crucial progress towards a solid contract”.
“I want to thank the union workers, carriers and port operators who are acting with patriotism to reopen our ports and ensure the availability of essential supplies for recovery and rebuilding following Hurricane Helene”he added. Joe Biden refused to intervene, and the White House spokesperson judged that“It’s time for the USMX to negotiate a fair deal with dockworkers that reflects their important contribution to our economic recovery”.
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Former President Donald Trump, who is seeking a new term, estimated in Milwaukee that Joe Biden “should have worked out an agreement between them” and noted that the dockers represented « the force lives » of the country.
Some 45,000 dockworkers members of the ILA have been on strike since Tuesday in thirty-six ports managed by the USMX on the east coast and the Gulf of Mexico, for lack of agreement on a new six-year social agreement. This represents on average more than $2.1 billion (1.9 billion euros) in business value per day, according to several sources.
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The carriers, forced to reroute their boats, had planned to apply surcharges: an additional $1,000 per container for the German shipowner Hapag-Lloyd AG, between $800 and $1,500 for its French competitor CMA CGM, according to the German logistics platform Container xChange. And up to $3,780 for the Danish giant Maersk, according to analysts at TD Cowen. And, at the same time, prices increased towards destinations where there was no strike.
Joe Biden warned Tuesday that his administration would monitor “any price gouging activity that would benefit foreign shipowners, including those serving on the USMX board”.
According to Oxford Economics, each week of strike would have reduced the American GDP by 4.5 to 7.5 billion dollars and, in turn, up to 105,000 people could have lost their jobs.
Economic results that have jumped for carriers
The Minister of Transport, Pete Buttugieg, urged the two parties on Wednesday to find an agreement and reopen the blocked ports in the United States, believing that their positions were not “not so economically distant” and emphasizing that there was much to do after the devastating passage of Hurricane Helene in the south of the country.
He also reported that maritime carriers saw their results jump by around 350% in ten years while dockworkers’ salaries increased by only 15% over the same period.
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Discussions, which began in May, were suspended for several weeks then reactivated a few hours before the previous contract expired Monday evening. The USMX had raised its offer, proposing in particular a salary increase of 50% over the duration of the agreement, but which had been rejected by the union. He initially demanded 77%, according to American media, and notably calls for more protections against job losses linked to automation.
