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Union and employers reach agreement to avoid a second US port strike

The union that represents 45,000 dockworkers on the U.S. East Coast and Gulf Coasts, and their employers announced on Wednesday they had reached a tentative agreement on a six-year contract. This prevented further strikes which could have disrupted supply chains and taken its toll on U.S. economic growth.

In a joint press release, the International Longshoremen's Association and the United States Maritime Alliance employer group called the agreement a win-win. The agreement includes a resolution on automation, the most difficult issue to resolve.

The groups stated that "this agreement protects existing ILA jobs, establishes a frame work for implementing new technologies to create more jobs, while modernizing East Coast and Gulf Coast ports. It will make them safer and efficient and provide the capacity needed to keep our supply chain strong."

The terms of the agreement were not disclosed.

The talks were extended until January 15 in order to reach an agreement on automation. Analysts, shipping executives and customers were concerned that the parties could not resolve their impasse. This would lead to a second ILA-led strike, just days before Donald Trump's inauguration on Jan. 20, 2019.

A three-day ILA walkout in October triggered an increase in shipping costs and cargo backlogs in the 36 ports affected. After employers agreed to an increase of 62% in wages over the next six year, longshoremen returned back to work.

The ports from Maine to Texas are home to terminal operators such as APM, which is owned by Danish container carrier Maersk. Other major carriers, like China's COSCO and Switzerland's MSC, also have U.S.-based subsidiaries.

ILA and USMX agreed to continue working under the current contract, until the union could meet with the full Wage Scale Committee in order to schedule a vote of ratification and USMX's members were able ratify the final contract.

(source: Reuters)