The International Longshoremen's Association (ILA) and United States Maritime Alliance (USMX) reached a tentative agreement Wednesday for a new six-year master contract, averting another possible strike on Jan. 15.
ILA represents 45,000 dockworkers.
"We are pleased to announce that ILA and USMX have reached a tentative agreement on a new six-year ILA-USMX master contract, subject to ratification, thus averting any work stoppage on Jan. 15," the two sides said in a joint statement. "This agreement protects current ILA jobs and establishes a framework for implementing technologies and will create more jobs while modernizing East and Gulf coast ports — making them safe 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."
[RELATED: Potential port strike could disrupt key industries and freight flow]
Details of the deal were not released, but the sticking point for this round of negotiations was automation of port technology. A three-day strike in October triggered a surge in shipping prices and cargo backlogs. Workers returned to the docks after USMX agreed to a 52% wage increase over the next six years.
"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," says National Retail Federation Vice President of Supply Chain and Customs Policy Jonathan Gold. "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."
CNBC reported the agreed-upon deal took automation off the table, but gave USMX the ability to implement technology its members believe would modernize the ports. The ILA secured a guarantee of specific jobs association to equipment being added. The network said sources familiar with the contract shared the details.
FTR Transportation Intelligence Senior Analyst Joseph Towers says a Jan. 15 strike appeared to be a real possibility before the deal.
"It's been a relief to see this has been averted," Towers says. "However, that doesn't make a difference to decisions that have already been made."
That includes inventory pull-forward as shippers prepared for an additional strike. In December, Gold called bringing in cargo early "a prudent step" as businesses again faced potential backlogs from closed ports.
