Longshoremen have reached an agreement with the US Maritime Alliance, suspending what could have been the first East and Gulf Coast strike since 1977.

Representing 45,000 dockworkers, the union will continue to work until 15 January as talks for a new six-year contract continue.

Earlier this week, dockworkers walked out at 36 major US ports after their contract expired, demanding higher wages and restrictions on automation.

These ports, which handle nearly half of the country’s ocean freight, were suddenly idle, sending shockwaves through global supply chains. Business owners, already bracing for disruption, feared shortages during the peak holiday season.

Fortunately, workers are set to return to their posts by the end of the week. With a deal in place, concerns about economic instability have eased, at least for the moment. The temporary resolution has given both sides some breathing room, but the full agreement has yet to be finalised.

The strike, although brief, had an immediate impact, with ports from Maine to Texas grinding to a halt. The timing couldn’t have been worse, coming just before the busy holiday season and amidst the build-up to a presidential election.

However, a compromise on wages brought some hope to an otherwise tense standoff. The union agreed to pause the strike after securing a significant wage increase—though not quite what they had initially demanded.

Negotiations continue with automation at the forefront

The union representing the dockworkers, the International Longshoremen’s Association (ILA), managed to secure a 62% wage increase over the next six years.

A joint statement was issued, stating: “The International Longshoremen’s Association and the United States Maritime Alliance, Ltd. have reached a tentative agreement on wages and have agreed to extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues. Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume.”

Initially, they had been pushing for a 77% rise, while the US Maritime Alliance had countered with a nearly-50% increase. Although the final deal falls short of the union’s original demands, this agreement buys time for further discussions on other crucial issues, such as automation, which remains a major sticking point.

Automation has long been a contentious issue, with the union strongly opposed to automated systems that could potentially replace human labour.

As it stands, negotiations on this front are far from resolved. The two sides are expected to revisit these discussions before the next deadline in January. Until then, the ports will remain operational, avoiding further disruption.

Matthew Shay, President and CEO of the National Retail Federation, said: “The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy.”