US port workers and operators reach deal to end East Coast strike immediately

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By Doyinsola Oladipo and David Shepardson

NEW YORK/WASHINGTON (Reuters) -U.S. dock workers and port operators reached a tentative deal that will immediately end a crippling three-day strike that has shut down shipping on the U.S. East Coast and Gulf Coast, the two sides said Thursday.

The tentative agreement is for a wage hike of around 62% over six years, two sources familiar with the matter told Reuters, including a worker on the picket line who heard the announcement. That would raise average wages to about $63 an hour from $39 an hour over the life of the contract.

The International Longshoremen’s Association (ILA) workers union had been seeking a 77% raise while the employer group – United States Maritime Alliance (USMX) – had previously raised its offer to a nearly 50% hike.

The deal ends the biggest work stoppage of its kind in nearly half a century, which blocked unloading of container ships from Maine to Texas and threatened shortages of everything from bananas to auto parts, triggering a backlog of anchored ships outside major ports.

The union and the port operators said in a statement that they would extend their master contract until Jan. 15, 2025 to return to the bargaining table to negotiate all outstanding issues.

“Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume,” the statement said.

Among key issues that remain unresolved is automation that workers say will lead to job losses.

Union boss Harold Daggett said previously that employers such as container ship operator Maersk and its APM Terminals North America had not agreed to demands to stop port automation projects that threaten jobs.

U.S. President Joe Biden’s administration had sided with the union, putting pressure on the port employers to raise their offer to secure a deal and citing the shipping industry’s bumper profits since the COVID-19 pandemic.

The tentative deal “represents critical progress towards a strong contract,” Biden said on Thursday. “Collective bargaining works,” he added.

His administration has repeatedly resisted calls from business trade groups and Republican lawmakers to use federal powers to halt the strike – a move that would undermine Democratic support among unions ahead of the Nov. 5 presidential election.

The White House had been heavily involved in talks to get a deal, sources said.

After days of talks, White House Chief of Staff Jeff Zients convened a 5:30 a.m. (0930 GMT) virtual meeting on Thursday with the CEOs of ocean carriers and impressed upon them the need to reopen the ports to speed hurricane recovery efforts, according to a source briefed on the events.

The port strike hit just as southeastern states were struggling for supplies following a deadly hurricane.

Top White House economic adviser Lael Brainard told the carriers at the meeting they needed a new offer to end the strike, and asked them to put a new offer on the table. By midday the shippers had agreed to make a new higher offer.

Acting Secretary of Labor Julie Su told the carriers they could get the union to the table and leaders would agree to extend the contract, if the new offer was higher. She was in New Jersey to meet with union leaders to secure their agreement, the sources said.

‘GOOD NEWS’

The ILA launched the strike by 45,000 port workers, its first major work stoppage since 1977, on Tuesday after talks for a new six-year contract broke down.

At least 45 container vessels that have been unable to unload were anchored outside the strike-hit East Coast and Gulf Coast ports by Wednesday, up from just three before the strike began on Sunday, according to Everstream Analytics.

JP Morgan analysts have said the strike would cost the U.S. economy around $5 billion per day.

The strike affected 36 ports – including New York, Baltimore and Houston – that handle a range of containerized goods.

“The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy, National Retail Federation said in a statement. “The sooner they reach a (final) deal, the better for all American families.”

National Association of Manufacturers CEO Jay Timmons said “cooler heads have prevailed and the ports will reopen” and called it “a victory for all parties involved – preserving jobs, safeguarding supply chains and preventing further economic disruptions.”

Economists have said the port closures would not initially raise consumer prices because companies had accelerated shipments in recent months of key goods. However, a prolonged stoppage would have eventually filtered through, with food prices likely to react first, according to Morgan Stanley economists.

(Reporting by Doyinsola Oladipo; Additional reporting by David Shepardson in Washington; Writing by Richard Valdmanis and Peter Henderson; Editing by Jonathan Oatis, Sayantani Ghosh and Sonali Paul)