A strike by tens of thousands of dockworkers on the East and Gulf coasts, that could have seriously hurt the U.S. economy had it continued, has been called off.
All workers were called back to work Thursday, after a three-day strike, following a tentative agreement on wages between the International Longshoremen's Association and the United States Maritime Alliance, representing ocean carriers and port operators.
The two sides have agreed to a 62% wage increase over six years, according to sources who were familiar with the deal but not authorized to speak publicly about it. The union had been seeking a 77% increase over six years. A day before the strike began, the companies had offered nearly 50% in raises.
The parties have also agreed to extend the existing contract until Jan. 15, 2025. They will return to the bargaining table to negotiate all other outstanding issues, including the union's demand of a ban on all automation at the ports.
The White House worked behind the scenes
The White House had faced mounting pressure from House Republicans and hundreds of industry groups to intervene. They warned of widespread harm to supply chains and the broader economy if the strike was allowed to continue.
But President Biden repeatedly vowed to let the collective bargaining process play out.
"I don't believe in Taft-Hartley," Biden told reporters days before the strike, citing the federal law that allows the president to call for an 80-day cooling-off period when the nation's safety is at risk.
About 12 hours after the strike began on Tuesday, Biden issued a statement urging the U.S. Maritime Alliance to present what he called a fair offer, citing the 800 percent growth in profits some ocean carriers saw in the pandemic.
"It’s only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well," he wrote.
Biden’s message to the companies also tied in hurricane relief efforts. Noting that dockworkers play an essential role in getting essential supplies to communities affected by Hurricane Helene, he said now is not the time for ocean carriers to refuse to negotiate a fair wage.
Meanwhile, senior leaders in his administration, including National Economic Advisor Lael Brainard, White House Chief of Staff Jeff Zients, and acting Labor Secretary Julie Su, were holding a flurry of calls with the foreign shipping companies and with the union, according to a source familiar with the discussions who was not authorized to speak. After several days of pressure, the companies agreed to put a higher offer on the table, the union accepted that offer and also agreed to extend the contract so negotiations over all other issues could resume.
On Thursday night, after the tentative deal was announced, Biden issued a statement thanking all the parties for acting patriotically to reopen the ports.
“We’ve been working hard on it,” he said. “With the grace of God, it’s gonna hold.”
Economic disaster averted
More than $2 billion worth of goods typically flow through these ports daily, from chemicals and clothing to bourbon and bananas.
The affected ports — from Boston to Houston — normally handle more than half of all cargo containers coming into the U.S., or about a million containers a month, as well as more than 300,000 containers heading out of the country, according to the freight-tracking company Vizion.
Effective immediately, all work will resume, the two sides said in a joint statement. But it could take some days to clear the backlog of ships — scores of them — that were waiting offshore for the strike to end.
In a statement, Jay Timmons, President of the National Association of Manufacturers said manufacturers were encouraged that cooler heads had prevailed.
“It is a victory for all parties involved—preserving jobs, safeguarding supply chains and preventing further economic disruptions,” Timmons wrote.
Ahead of the holiday season, retailers also expressed relief.
“Without the specter of disruption looming, the U.S. economy can continue on its path for growth and retailers can focus on delivering for consumers," the Retail Industry Leaders Association said in a statement.
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