What’s happening
The International Longshoremen’s Association—the union that represents East Coast and Gulf Coast port workers—and USMX reached a tentative agreement to extend their master contract until Jan. 15. The current contract allows both sides to return to the bargaining table and discuss their outstanding issues, according to a news release by ILA.
“Effective immediately, all current job actions will cease and all work covered by the master contract will resume,” ILA and USMX said in a joint statement.
The master contract increased wages by 62% for the workers—a $4-per-hour increase over six years—and allowed the union to address their concerns about automotive containers.
The tentative agreement was reached on the third day of the strike, which could have affected the U.S. economy catastrophically, said Eleftherios Iakovou, director of supply chain management and a professor at Texas A&M University.
“Impact across all kinds of supply chains at a time when supply chains are already strained in a very worrisome global landscape. ... We have the Helene hurricane that has affected an increased demand for emergency equipment and materials in the southeast United States, so the impact is huge,” he said in an Oct. 3 interview before the strike was suspended.
The background
On Sept. 30, the six-year existing contract between the ILA and USMX expired. Following the expiration of the contract at midnight, the union went on strike after being unable to come to an agreement with the USMX.
On Oct. 1, hundreds of workers at the Port of Houston joined their union in a national strike for a better contract. This was the union’s first national strike since 1977, according to the union’s website.
The union demanded a 77% wage increase—$5-per-hour wage increase over six years—and a ban on automotive containers. The Port of Houston, one of the busiest port locations in the U.S., was not involved in negotiations or discussions regarding the contract, according to an Oct. 1 news release.
By the numbers
Port workers are responsible for importing goods and services to cities. The strike could have cost the U.S. economy up to $5 million per day, a J.P. Morgan analysis found.
Additionally, if the strike had lasted for at least 30 days, the Port of Houston could have seen approximately $100 million in disruptions, in exports and imports, according to an analysis by MITRE, a not-for-profit think tank.
A coalition of over 270 retailers and manufacturers sent a letter to President Joe Biden Sept. 17 asking him to intervene in the strike.
However, despite the letter and the potential consequences to the U.S. economy, Biden said he would not intervene in the strike. Under the 1947 Taft-Hartley Act, the president can intervene in a national strike and seek a court order for an 80-day cooling period, which would effectively suspend the strike.
Following the end of the strike, Biden in a statement congratulated both parties on the agreement and emphasized the need for collective bargaining.
“I want to applaud the International Longshoremen’s Association and the United States Maritime Alliance for coming together to reopen the East Coast and Gulf ports,” he said in an Oct. 3 White House statement. “Today’s tentative agreement on a record wage and an extension of the collective bargaining process represents critical progress towards a strong contract.”
