Striking U.S. dockworkers have reached a tentative agreement with shipping and port terminal companies for a wage hike of around 62% that will end a three-day strike, a source familiar with the matter told NorthJersey.com. That could open the ports Thursday night.
In a joint statement, the International Longshoremen's Association — the union representing the dockworkers — and the United States Maritime Alliance, a group of shipping and port terminal companies, said they have reached a tentative agreement on wages and "have agreed to extend the old contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues."
As a result, striking will end immediately and work will resume at 36 ports from Maine to Texas — including the Port of New York and New Jersey — that had been impacted.
Over 47,000 dock workers had walked off the job late Monday night, including 4,500 from New York and New Jersey.
It marked the ILA’s first strike since 1977, which lasted 45 days. And it came just weeks ahead of the busy holiday shopping season, where American consumers last year spent over $964 billion, according to the National Retail Federation, a trade group.
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A strike of even a few days could mean weeks of supply chain delays, and a strike lasting a week or longer would have meant delays of over a month, said Peter Tirschwell, vice president for maritime and trade at S&P Global.
A JPMorgan analysis projected that a strike could cost the U.S. economy $5 billion daily.
“Retailers are running lean currently so inventory would get drawn down, and prices of shipping, and goods prices would go vertical for a period of time,” said Erik Clark, portfolio manager of the Rational Dynamic Brands Fund. “We could get the kind of inflation for 6 months similar to or worse than peak inflation levels a year ago.”
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Still, many importers — retailers and other companies — had been aware for months of the possibility of a strike, and therefore pushed forward their importing schedule so that a lot of holiday goods are already in the country and safe from a strike, Tirschwell said.
Ports on the West Coast reported a surge in shipping in the months leading up to the strike.
How the strike has affected New Jersey
The Port of New York and New Jersey, with key facilities in Newark, Elizabeth and Staten Island, is second busiest on the East Coast.
Some of the most common goods that pass through the ports include furniture; appliances, machinery and parts; plastics; wood pulp like waste and scrap; and wood.
The strike set off a mini panic run on toilet paper , paper towels and other essentials, even though officials had said that was not necessary.
Roughly 90% of American toilet paper is produced within the U.S., said the California-based Center for Land Use Interpretation.
The largest producers of American toilet paper are Procter & Gamble, Kimberly-Clark and Georgia-Pacific, all three of which own and operate plants across the continental U.S.
Why the union went on strike
The IL A contract that expired on Monday shows that the starting pay for dockworkers was $20 per hour. Pay rises to $24.75 after two years, $31.90 after three and tops out at $39 for workers with at least six years on the job.
The union went on strike demanding wage increases of 77% over six years with a $5 increase each year of the contract. Workers would make $44 the first year, $49 the second and up to $69 in the final year.
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The United States Maritime Alliance, or USMX, a group of shipping and port terminal companies, had said Monday that its latest offer included raises of nearly 50%.
The ILA also demanded guarantees that their jobs will be protected from automation at the ports .
Leaders at the ILA had cut off contract talks in June after learning that a form of automation had been introduced at the Port of Mobile in Alabama, an action they said violated the existing contract.
What public officials have been saying
President Joe Biden voiced his support for the striking dockworkers, but declined to intervene and use his powers under the 1957 Taft-Hartley Act to end the strike and force the dockworkers back to work.
Both Vice President Kamala Harris and former President Donald Trump have eyed the support of union labor as key in their potential paths to the White House, and the strike comes weeks before a presidential and congressional election.
Harris this week said the dockworkers strike “is about fairness. Foreign-owned shipping companies have made record profits and executive compensation has grown. The longshoremen, who play a vital role transporting essential goods across America, deserve a fair share of these record profits."
Earlier Thursday, in a joint statement with several other governors of state affected by the strike, Gov. Phil Murphy and New York Gov. Kathy Hochul said that "it’s critical for USMX and the ILA to reach a fair agreement soon that respects workers and ensures a flow of commerce through our ports."
This article contains material from USA Today.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com ; Twitter: @danielmunoz100 and Facebook
This article originally appeared on NorthJersey.com: Striking dockworkers reach tentative deal on new contract, and NJ, NY ports to reopen
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