Both sides have returned to negotiations but job protections from automation may still prove a sticking point for the union. Credit: Spencer Platt via Getty Images

The strike action affecting some of the US biggest ports on the East and Gulf coasts has come to an end after three days, with the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX) coming to a tentative agreement on wages. 

The two sides have agreed to extend the existing “Master Contract” covering the port workers at 36 ports until 15 January 2025 as they return to negotiations after agreeing to a reported 62% wage increase. 

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While neither party has commented on the agreement, aside from in a short joint statement announcing the end of the strikes, President Joe Biden said the return to negotiations represented “critical progress” towards a new contract. 

He said: “I congratulate the dockworkers from the ILA, who deserve a strong contract after sacrificing so much to keep our ports open during the pandemic. 

“And I applaud the port operators and carriers who are members of the US Maritime Alliance for working hard and putting a strong offer on the table.” 

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The ILA began its strike action on Tuesday morning after the initial round of negotiations with the USMX failed to reach a positive outcome, with a last minute offer from the port owners association for a 50% wage increase being rejected by the union. 

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Though Reuters has reported the tentative agreement includes a 62% wage increase, closer to the 77% first called for by the ILA, the issue of automation is still likely to prove a sticking point for the union. 

The USMX had offered to keep protections from the existing contract against automative technology replacing jobs, the ILA has demanded an outright ban on the tech, with union president Harold Daggett previously stating it was in the country’s best interest to keep port workers in employment and paying tax. 

While the strikes may have already cost the US economy around $15bn, based on JP Morgan’s analysis of a $5bn hit per day, the earlier than expected conclusion to the action will be strongly welcomed by the maritime industry and third-party stakeholders.

Despite this, the relatively short action will still likely affect the industry for some time with freight analysis company Xeneta identifying 44 ships currently queuing to enter the affected ports and more than 120 en route.

Xeneta’s Chief Analyst Peter Sand said the ripple effect of the delays could be seen for months as the affected ships were put off schedule, he said: “The dozens of ships delayed on the US East Coast and Gulf Coast will also be late arriving back in the Far East.

“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.”