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ILA Longshoremen Agree to Return to Work Until Jan. 15, 2025

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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The three-day strike at 36 U.S. ports has been suspended as the ILA union members and United States Maritime Alliance have come to a tentative agreement. (Photo courtesy of the Port of Baltimore)

Agricultural groups breathed a sigh of relief late Thursday when the International Longshoremen's Association (ILA) agreed to return to work at ports along the East Coast and Gulf of Mexico.

In a statement on their Facebook page Thursday evening, the ILA said: "International Longshoremen's Association (ILA) and the United States Maritime Alliance, Ltd. (USMX) have reached a tentative agreement on wages and have agreed to extend the Master Contract until Jan. 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."

Dow Jones reported the breakthrough Thursday came after port employers offered a 62% increase in wages over six years, according to people familiar with the matter. "The new offer, up from an earlier proposed raise of 50%, came after the White House privately and publicly pressed the large shipping lines and cargo terminal operators who employ the longshore workers to make a new offer to the union."

This temporary resolution couldn't have come at a better time as ships have been anchored off the striking ports since Tuesday. Seatrade Maritime News said, "According to Vizion's container tracking, on the second day of the strike the number of vessels bound for ILA ports was 368, up from 348 the previous day. Four vessels had moves away from U.S. ports affected by the ILA strike with two headed for the Bahamas, one for Halifax, and one ship sailing [to] Panama." Here is a link to the tracking and you can see the traffic heading to the ports:

https://public.tableau.com/…

NBC News reported as of Wednesday at least 45 container vessels that were unable to unload had anchored up outside the strike-stricken East Coast and Gulf Coast ports. That number likely increased through the day Thursday.

Earlier Thursday, WorldCargo News reported, "Container shipping companies, including CMA CGM, Ocean Network Express (ONE), and COSCO, are invoking force majeure due to the impacts of ongoing ILA strike."

"CMA CGM said that it is invoking Term 10 of its Bill of Lading due to the impacts of the strike and that additional costs may apply to cargo on the water from Oct. 1, 2024. Ocean Network Express (ONE) also declared force majeure, citing terminal closures and transport delays due to the ILA strike and Hurricane Helene, which further complicates port operations. COSCO has also declared force majeure for the affected regions under Clause 20 of their Bill of Lading and introduced a congestion surcharge starting mid-October, ranging from US$ 1,000 to $3,375 per 40' container, depending on the origin."

Also on Thursday evening, the Georgia Port Authority in a client notice stated, "Georgia Ports' operations would resume Friday morning."

AG INDUSTRY REACTIONS

The news of the ILA returning to work is also music to the ears of Agriculture groups who urged President Biden to intervene.

On Thursday evening, U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom issued the following statement: "On behalf of USMEF's member companies and organizations, I want to thank all parties involved in the effort to get cargo moving again off the East and Gulf Coasts. This is a tremendous relief to everyone in the U.S. meat and livestock industries, as about $100 million worth of beef and pork products are exported every week through East and Gulf Coast ports. Exports are a critical revenue stream at all levels of the U.S. red meat supply chain, and our industry needs all U.S. ports operating to meet the needs of our international customers and to maintain the United States' reputation as a reliable red meat supplier."

The National Grain and Feed Association (NGFA) also sent out a press release to members with a statement from Mike Seyfert, the president and CEO of NGFA: "It is a relief that a tentative agreement has been reached and the ports will be open for business once again. For U.S. farm products to flow smoothly to domestic and international markets, it is essential for all parts of the supply chain to be fully functioning. The shutdown of these vital shipping ports was already starting to create big problems for NGFA's members and America's farmers during harvest season. Left unresolved, this strike could have led to higher transportation costs for agricultural shippers and jeopardized valuable customer relationships. For the sake of rural America, we hope that the parties involved will work diligently between now and Jan. 15 to find a long-term agreement that works for both sides and keeps our shipping channels open."

Mike Steenhoek, executive director of the Soy Transportation Coalition said, "Of all the occupations in the world, farmers are among those who experience the highest degree of unpredictability and uncertainty. Despite these challenges, farmers show a remarkable ability to predictably and reliably provide food for U.S. and international customers. It is therefore not unreasonable to insist that port workers and port operators provide a similar degree of reliability to agriculture and the many industries that depend upon them. We sincerely hope a lasting agreement can be achieved by Jan. 15 that benefits both parties. We continue to not pick sides between the ILA and the USMX, but we most certainly are on the side of the American farmer. Having a reliable system of ports is clearly in the best interest of the American farmer."

"While the wage increase has been settled, both parties will continue negotiations on outstanding issues", noted Mike Schuler, editor gCaptain.com. "The extension of the Master Contract until early 2025 provides a framework for ongoing discussions and ensures labor stability in the short term."

In other words, expect ongoing rhetoric as negotiations continue, but for now, the best rhetoric is "temporary suspension of port strike."

Mary Kennedy can be reached at Mary.Kennedy@dtn.com

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