According to the Associated Press, the International Longshoremen’s Association has agreed to suspend their strike just days after dockworkers across the East and Gulf Coasts began their work stoppage. ILA members will return to work immediately, with the union extending the timeframe for contract negotiations with the United States Maritime Alliance (USMX) employer group.
Now, the two parties have until Jan. 15 to finalize a new 6-year contract. Per AP’s reporting, the ILA and USMX have already tentatively agreed on wage increases, which had been a major sticking point for the union. However, it is unclear whether or not the parties have made any progress on concerns over automation.
In June, workers in Mobile, AL and other ports accused the employer of automating tasks intended to be performed by ILA members. The ILA has been vocal about its desire to secure guarantees against such automation going forward.
Analysts had initially projected that the stoppage could cost the American economy as much as $5 billion a day. French shipping group CMA CGM, the world’s third-largest container shipper, had also announced that it would consider charging additional shipping fees for vessels that might have been delayed by the strike. However, it appears that the economic consequences of the strike will ultimately be minimal with the 36 ports closed by the strike on Tuesday now already set to reopen.
The Biden administration will also be relieved of some political pressure by the suspension. Some companies and political leaders had been calling on the President to help put an end to the strike, but the union-friendly administration was reluctant to intervene. Now, it appears that no such intervention will be necessary.
The news is also sure to please manufacturers across the Southeast.
In Alabama, auto and airplane manufacturers like Honda, Hyundai, Mercedes-Benz, and Airbus heavily rely on Alabama’s Port of Mobile. The port has become a major thoroughfare for auto parts as the industry has boomed in Alabama in recent years. The port’s recent $60 million terminal addition includes a vehicle processing center, and last year, Alabama shipped more than $11 billion in passenger vehicles, ranking it highest of any state in car exports.
A key Airbus facility in Mobile is also responsible for the manufacture of A320, A321, and A220 airplanes, with the plant receiving parts through the city’s port.
The port’s 170 workers are now set to return to work alongside the 45,000 other ILA members who had been on strike as of Tuesday, and any major disruptions which a prolonged closure may have posed to manufacturers’ supply chains will be largely avoided.
