In a joint statement on 3 October 2024, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) announced that they have “reached a tentative agreement on wages and have agreed to extend the Master Contract until 15 January 2025, to return to the bargaining table to negotiate all other outstanding issues”.
The statement continued: “Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume.”
This marks an end to the first coast-wide strike since 1977 at ports from Maine to Texas, which began on 1 October. The dispute between the USMX and the ILA revolves around ‘wages and benefits’ for longshore workers at ports on the East and Gulf Coasts.
In a document entitled ‘Securing the 61.5% Raise: Understanding the Process’, the ILA and its president Harold J Daggett provided “additional clarification about the wage increase process”.
In the letter, Daggett says: “The ILA successfully negotiated a historic 61.5% wage increase spread over six years. This achievement is unprecedented and serves as testament to the union’s commitment to securing fair compensation for its members.
“However, it is critical to understand why we cannot take that raise immediately. This decision is a crucial part of the overall strategy that will allow us to negotiate and secure other important matters in the contract.”
The ILA president explained that by accepting a gradual wage increase and extending the Master Contact until 15 January 2025, the union can avoid having to sign a “no-strike clause”, while also allowing more time for the two parties to negotiate on matters such as the use of automation to replace staff members and healthcare benefits for members and retirees.
The document notes that “once the contract is ratified, every [ILA] member will receive a retroactive payment dating back to 1 October [2024]”, reassuring members that they “are not losing any money by waiting”.
Daggett concluded the letter to ILA members by saying: “We plan to meet with USMX as soon as possible to negotiate the best contract in ILA history.”
The impact of the strike on supply chains was a key concern for the industry, with JP Morgan analysts suggesting before the strike began that it could cost the American economy US$5 billion per day.
On 2 October, Everstream Analytics shared some data concerning the “fallout” from the US port strike, which showed that the ports in Savannah, New York and Norfolk were amongst the most affected in terms of container ship queueing.
Jana Santoro, senior manager of intelligence solutions at Everstream Analytics, said: “What we have been seeing are vessel queues outside of those major US ports affected by the strike, starting to sharply increase over the past couple of days.
“We’ve seen particular increases off the coast of Savannah, Norfolk and New York […] and our latest numbers as of this morning [2 October] show a total of 45 container vessels waiting at these designated anchorage areas outside of these ports and they’re carrying, combined, over 300,000 TEUs.”
At the Port of Savannah, most drastically affected by the strikes according to this data, queues continued to grow as the strike went on. On 29 October, just three vessels were waiting at the port, but this rose to 10 on 30 October, the day before the strike. Once the strike had begun on 1 October, this number increased to 11 and by 2 October, 13 container ships were reportedly queuing there.
Santoro claimed that the impact of the strike on the supply of some consumer and retail goods to the US may have been limited as “many importers had anticipated that the strikes would take place” and “moved up their peak shipping schedule” accordingly in preparation for the strike.
She did, however, suggest that industries with time-sensitive supply chains – such as agri-food and pharmaceutical supply chains, which are dependent on perishable products, and automotive component supply chains, which often rely on a just-in-time (JIT) manufacturing processes – were more vulnerable to the effects of the strike.
“It’s estimated that these types of industries – the more time-sensitive industries – have roughly half the inventory of retailers, so about 1-2 weeks worth of inventory on hand, so these are the industries that are of concern and we’re looking out for as being the most vulnerable to feeling the most disruptions from raw materials shortages, even in the event of short-term strike action or medium-term strike action,” Santoro added.
The strike previously got the attention of US president Joe Biden, who on 1 October urged the USMX to “come to the table and present a fair offer to the workers of the ILA”. Upon the announcement that an agreement between the two parties had been reached, Biden said in an official White House statement: “I want to applaud the ILA and the US Maritime Alliance for coming together to reopen the East Coast and Gulf ports.
“Today’s tentative agreement on a record wage and an extension of the collective bargaining process represents critical progress towards a strong contract.
“I congratulate the dockworkers from the ILA, who deserve a strong contract after sacrificing so much to keep our ports open during the pandemic. And I applaud the port operators and carriers who are members of the US Maritime Alliance for working hard and putting a strong offer on the table.
“I want to thank the union workers, the carriers and the port operators for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding. Collective bargaining works, and it is critical to building a stronger economy from the middle out and the bottom up.”
Following the undeniable success of IntraLogisteX 2024 in the UK, the exhibition is heading across the Atlantic very soon, with IntraLogisteX USA taking place on 22-23 October 2024 at Miami Beach Convention Center.
Click here for more details and to register!
Plus, the Supply Chain Excellence Awards are also heading stateside as Miami welcomes the very first Supply Chain Excellence Awards USA on 21 October 2024.
For more information about the awards, categories and how to enter, click here!
