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Analysts had warned that a prolonged strike by dockworkers could seriously damage the US economy.
US dockworkers ended a three-day strike Thursday by reaching an “agreement in principle” on wages and an extension of their contract, the union and employers announced in a joint statement.
The International Longshoremen’s Association (ILA) had initiated the strike early on Tuesday after negotiations with the United States Maritime Alliance (USMX), which represents shipping lines and terminal operators, reached an impasse.
The strike, which involved 45,000 workers according to the ILA, halted operations at 36 ports across the country that handle a wide range of goods, from food to electronics, just weeks before the presidential election.
On Thursday evening, the two sides announced that they had “reached an agreement in principle on wages and agreed to extend the framework contract until 15 January 2025 in order to return to the negotiating table to discuss all other outstanding issues.”
“All ongoing actions will cease with immediate effect,” they said.
Salary increase
The statement did not detail the terms of the agreement, but The Wall Street Journal, citing sources familiar with the matter, reported that USMX proposed a 62% wage increase over six years, which allowed the pact to be closed.
President Joe Biden , who had refused to intervene in the negotiations, citing respect for collective bargaining rights, welcomed the suspension of the strike late on Thursday.
“I want to thank union workers, shippers and port operators for acting patriotically to reopen our ports and ensure the availability of essential supplies for recovery and rebuilding after Hurricane Helene,” he said in a statement.
Outside the White House, the president added: “They have the next 90 days, they will resolve everything.”
Former Republican president and White House candidate in the November elections, Donald Trump , had blamed Biden on Tuesday for the crisis: “He should have reached an agreement,” he accused.
Crisis averted
Analysts had warned that a prolonged strike could deal a serious blow to the U.S. economy , potentially causing shortages of some goods and raising prices at a time when inflation has been moderating.
Oxford Economics estimated that the port strike would reduce US GDP by between $4.5 and $7.5 billion per week, with the overall impact depending on its duration.
However, Capital Economics said fears about the economic impact of the shutdown were “overblown”, partly because recent supply chain disruptions have made businesses more aware of the need to take precautionary measures.
The strike had begun at a politically sensitive time, almost a month before the US presidential election, but this provisional agreement eases the pressure.
