Maritime employers stress that economic growth relies on efficient port operations, underscoring the need for faster cargo movement to bolster supply chains.

A tentative agreement has been reached between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), successfully averting a potential strike that was set for January 16, 2025.

Management has assured that while technological advancements are necessary for productivity, they do not intend to eliminate union jobs, although the union remains cautious.

This agreement follows a significant three-day strike in October 2024, which disrupted operations at 36 ports and highlighted the critical nature of port efficiency for the economy.

The National Retail Federation has emphasized the importance of this agreement for ensuring timely delivery of retail goods to consumers, reflecting the broader economic implications.

Both parties have highlighted that the agreement will create jobs, support American businesses, and help maintain the nation's economic position globally.

Key issues during negotiations included pay and job security, particularly concerns over automation potentially replacing human workers in port operations.

The ILA, representing around 45,000 members, has expressed worries that increased automation, particularly with semi-automated cranes, might threaten job security.

Shippers are advised to remain vigilant, as external factors such as geopolitical tensions and conflicts could still impact freight rates negatively.

Negotiations had stalled previously over technology issues, with USMX concerned that ILA's demands could hinder modernization efforts at the ports.

As of 2024, while all ten largest U.S. ports utilize some degree of automation, only three are fully automated, indicating a gradual shift towards modernization.

Had the strikes proceeded, additional disruption surcharges of up to USD 3,000 per FEU were anticipated, complicating shipping costs for carriers.