UPDATE: Strike averted as ILA, ports reach tentative agreement

HOUSTON (ICIS)–Union dockworkers and US Gulf and East Coast port operators tentatively agreed to a new six-year contract Wednesday, averting a strike that was about a week away.

The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) will work under the existing agreement until the union can meet with its full wage scale committee and schedule a ratification vote, and USMX members can ratify the terms of the final contract.

The two sides agreed on the financial portion of the contract in October, ending a three-day strike and postponing the work stoppage until 15 January.

A stalemate developed over automation at the ports, which port operators said was needed to remain competitive globally and which the union said would threaten human jobs.

“This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports – making them safer and more efficient and creating the capacity they need to keep our supply chains strong,” the parties said in a joint statement.

Details of the new tentative agreement will not be released to allow ILA rank-and-file-members and USMX members to review and approve the final document.

The October strike and the threat of next week’s work stoppage had some impact on market participants.

Many importers pulled forward volumes because of the possibility of a strike, pushing rates for shipping containers higher.

To mitigate risks, some buyers and suppliers took a wait-and-see approach, while others scheduled shipments with maximum deadline until the first week of January to ensure supply chain continuity and safeguard against potential disruptions that could affect pricing and availability.

Container and vessel availability was a challenge for exports following the impacts in ocean logistics from the three-day strike in October, with lead times to secure available space on a vessel being cited at four to six weeks.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets.

They also transport liquid chemicals in isotanks.

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