US ports reopen as strike pause clears holiday bottleneck
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The news: US ports in the East and Gulf coasts reopened on Friday (Saturday AEST) after a three-day port worker strike was suspended until 15 January, with workers beginning to clear a backlog of goods and over 40 ships waiting offshore.
The strike suspension comes as a relief to shoppers and retailers just in time for the critical holiday shopping season, easing pressure on ports that manage about half of the United States' cargo traffic.
The numbers: Workers returned under a tentative agreement offering a 62% wage increase over six years, after the White House pushed large shipping lines and cargo terminal operators to propose a better deal to the union.
The base hourly rate will rise from USD39 to USD63 per hour over six years, The Wall Street Journal reported citing sources familiar with the deal. The offer was increased from a previously proposed raise of almost 50%.
The union had been pushing for wage increases of up to 77% over six years, along with a total ban on port automation projects, which workers view as a risk to their job security.
The workers will be covered under the old contract, which expired on 30 September, until 15 January. One source told the WSJ the offer is contingent on dockworkers returning to work and agreeing to improvements in efficiency.
Shares of major shipping companies, including Maersk, Germany’s Hapag-Lloyd, and Cosco, dropped significantly on Friday following news of the agreement, which is expected to raise costs and dashed hopes for increased freight rates due to the labour disruptions.
The context: The settlement delays the strike and any potential shortages beyond the November presidential election, removing a potential risk for Democratic nominee Vice President Kamala Harris.
It also benefits the Biden-Harris administration, which has positioned itself as the most union-friendly in US history.
The new deal also means shipping lines, which saw record profits during the pandemic, will now have to decide how much of the additional costs to pass on to their customers, such as large retailers, manufacturers and farmers who rely on the East and Gulf coast ports for importing and exporting goods.
What they said: “With the grace of God, and the goodwill of neighbors, it’s gonna hold,” President Joe Biden said after the agreement.
He applauded both sides “for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding.”
Biden said that collective bargaining was “critical to building a stronger economy from the middle out and the bottom up.”
