Shippers today are praising an 11th-hour contract agreement that has averted the threat of a strike by dockworkers at East and Gulf coast ports that could have frozen container imports and exports as soon as January 16.
The agreement came late last night between the International Longshoremen’s Association (ILA) representing some 45,000 workers and the United States Maritime Alliance (USMX) that includes the operators of 14 port facilities up and down the coast.
The two sides had struck a deal in October after a three-day strike, agreeing to a pay raise for workers but temporarily tabling their continuing debate over the use of expanded automation for handling shipping containers.
Details of the new agreement on those issues have not yet been made public, but in the meantime, retailers and manufacturers are heaving sighs of relief that trade flows will continue.
“We are pleased to see the ILA and USMX come to a final agreement on a new contract, as U.S. ports on the East and Gulf Coasts play a critical role in the retail supply chain,” Jonathan Gold, the National Retail Federation (NRF)’s Vice President of Supply Chain and Customs Policy, said in a release.
“Providing certainty with a new contract and avoiding further disruptions is paramount to ensure retail goods arrive in a timely manner for consumers. The agreement will also pave the way for much-needed modernization efforts, which are essential for future growth at these ports and the overall resiliency of our nation’s supply chain,” Gold said.
The next step in the process is for both sides to ratify the tentative agreement, so negotiators have agreed to keep those details private in the meantime, according to identical statements released by the ILA and the USMX. In their joint statement, the groups called the six-year deal a “win-win,” saying: “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coasts ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong. This is a win-win agreement that creates ILA jobs, supports American consumers and businesses, and keeps the American economy the key hub of the global marketplace.”
The breakthrough hints at broader supply chain trends, which will focus on the tension between operational efficiency and workforce job protection, not just at ports but across other sectors as well, according to a statement from Judah Levine, head of research at Freightos, a freight booking and payment platform. Port automation was the major sticking point leading up to this agreement, as the USMX pushed for technologies to make ports more efficient, while the ILA opposed automation or semi-automation that could threaten jobs.
"This is a six-year détente in the tech-versus-labor tug-of-war at U.S. ports," Levine said. “Automation remains a lightning rod—and likely one we’ll see in other industries—but this deal suggests a cautious path forward."
