US importers and exporters will be breathing a sigh of relief after dockers at US container ports last night agreed to return to work after three days of strike action.
The industrial action was launched on Tuesday as the dock workers’ contract ended without an agreement on a new deal. The strikes threatened to cause chaos to US supply chains as ports up and down the US East and Gulf Coast were forced to shutter.
However, last night, the International Longshoremen’s Association (ILA) and US Maritime Alliance (USMX) announced a temporary agreement had been reached.
“The ILA and the USMX have reached a tentative agreement on wages and have agreed to extend the Master Contract until January 15, 2025, to return to the bargaining table to negotiate all other outstanding issues,” the two said in a joint statement.
“Effective immediately, all current job actions will cease, and all work covered by the Master Contract will resume.”
While there is potential for further strike action in 2025 if an agreement cannot be reached, it would at least take place during the quieter winter season rather than in the middle of the peak season for ocean shipping.
And there will be a backlog of cargo to clear. It is thought that for every day a port is closed, it will take around five days for supply chains to return to normal.
There could also be disruption to sailing schedules, according to Peter Sand of supply chain data provider Xeneta.
“The dozens of ships delayed on the US East Coast and Gulf Coast will also be late arriving back in the Far East,” the analyst said. “This will impact schedules towards the end of this year and possibly into 2025 in the run-up to Lunar New Year at the end of January, which traditionally sees an increase in goods shipped out of the Far East.”
He added: “We must now wait to see how quickly the returning workers are able and willing to deal with the huge backlog of ships waiting to offload thousands of containers carrying billions of dollars of goods.”
Despite the concerns about backlogs, the news that a deal had been reached was welcomed by US retailers. US National Retail Federation (NRF) president and chief executive Matthew Shay said: “The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy.
“It is critically important that the ILA and USMX work diligently and in good faith to reach a fair, final agreement before the extension expires. The sooner they reach a deal, the better for all American families.”
There had been an expectation that prolonged strike action would result in some modal shift to air as companies looked to transport urgently needed goods into the country.
Charter brokers had already been reporting a rise in enquiries ahead of the end of the contract on October 1.
