U.S Dockworkers & Employers Avert Major Strike After Dispute Over Wages & Port Automation

A major strike by 45,000 dockworkers on the U.S. East and Gulf Coasts has been averted after the workers’ union and their employers reached a tentative deal on January 8, 2025.

The agreement, which includes a new six-year labour contract, resolves key issues that had been threatening to disrupt U.S. supply chains and the economy.

The International Longshoremen’s Association (ILA), which represents the workers, and the United States Maritime Alliance (USMX), the group representing employers, announced the deal in a joint statement.

Both sides described the agreement as a “win-win.” The deal covers various issues, including a resolution on automation at ports, one of the most contentious topics during the negotiations.

A sticking point in the discussions was the introduction of automated machinery at the ports, which the ILA had opposed. The union feared automation would lead to job losses for dockworkers.

However, according to sources familiar with the negotiations, the deal includes protections for current ILA jobs and guarantees that automation will create additional jobs as technology is implemented. This allows for the modernization of East and Gulf Coast ports while ensuring job security for workers.

The employers, represented by USMX, believe that automation will help ports move containers more efficiently, which they argue is necessary to keep U.S. ports competitive globally.

The agreement does not provide detailed information on how automation will be rolled out, but it is understood that the union and employers have found a compromise that addresses both job security and efficiency.

The tentative deal also follows an earlier wage agreement reached in October. After a three-day strike that disrupted ports, the employers agreed to a 62% wage increase over the next six years for dockworkers.

The new wage agreement will see the hourly rate increase from $39 to $63. With overtime and shift work, longshoremen could earn up to $200,000 a year in some ports, such as the Port of New York and New Jersey, where nearly 60% of workers earned between $100,000 and $200,000 in 2020.

The wage agreement was considered a critical part of the negotiations, but it was always contingent on resolving the issue of automation by January 15, 2025, with the ILA retaining the right to strike if no agreement was reached.

The tentative deal also avoids a potential strike that was set to begin on January 15, just days before President-elect Donald Trump’s inauguration. A strike would have disrupted ports along the East Coast, from Maine to Texas, which handle a major portion of U.S. container traffic.

The strike would have caused delays in shipments of goods, including automobiles, fresh produce, and pharmaceuticals. Many businesses had feared the impact of the strike and had already begun rerouting shipments through West Coast ports.

The agreement came after political support from President-elect Donald Trump, who had strongly backed the union’s position against automation. ILA President Harold Daggett credited Trump’s support for helping the union secure protections for American longshore jobs.

Although the deal has been reached, it still needs to be ratified by both the ILA’s full Wage Scale Committee and USMX members. The two sides have not disclosed the full details of the agreement until it is ratified.

The union had walked away from official negotiations in mid-November after employers insisted on introducing semi-automation at the ports. The ILA had been firm in its opposition to automation, which added to the uncertainty about reaching a deal before the deadline.

If ratified, the agreement would bring much-needed relief to businesses, shipping lines, and consumers who rely on the East and Gulf Coast ports for goods. Some companies had already rushed to bring goods into the U.S. before the deadline to avoid delays caused by a potential strike.

References: Reuters, NyTimes

Source: Maritime Shipping News