Updated Oct. 4, 2024

On Thursday Oct. 3, the International Longshoremen’s Assn. (ILA) agreed to suspend the strike after receiving an improved wage offer from employers, according to reports. U.S. Maritime Alliance (USMX) offered to increase wages by 62% over the course of a 6-year contract, the New York Times Reports. According to a joint statement, ILA and the USMX 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.

The ILA, which represents unionized workers at ports on the U.S East and Gulf coasts are on strike for the first time in 47 years. ILA’s contract with USMX, which represents 40 ocean carriers and terminal operators, expired on Oct. 1 at midnight. 

In June, the union canceled bargaining over what it claimed was an unfair use of technology that bypassed union labor. The sides haven’t met since, according to FreightWaves, a price reporting agency focused on the global freight market. 

Dock workers on the East Coast, Gulf Coast and Puerto Rico handle 43% of U.S. imports, and the strike would reportedly disrupt billions of dollars in trade. According to FreightWaves, ILA is looking for a 77% pay increase, and Harold Daggett, union president, reportedly has rejected a 40% increase. According to to the Wall Street Journal, "dockworkers typically earn a six figure annual salary because of work rules and overtime requirements.In the financial year of 2020, more than half of the 3,726 dockworkers at the Port of New Jersey earned more than $150,000, according to a report by the port's regulator." About 20% of dockworkers earned over $250,000 that year, WSJ reports. 

The strike will impact major ports in New Jersey, Virginia, Savannah, Ga., and Houston during one of the busiest times of year, reports the WSJ. 

CNH said in a statement, that it does use East Coast Ports for the import and export of units. “We are actively monitoring the strike situation, and we do not expect it to have any material impact on our ability to serve our customers,” the OEM said in the statement. 

Brian Arnold, vice president of Kubota North America, says Kubota receives about 75 shipping containers of components used in its manufacturing operations from east coast ports on a weekly basis — that accounts for about 4,000 containers annually. "The longer the strike lasts, there will be growing challenges in our ability to operate our production lines," he says. "In addition to receiving parts from the affected ports, we also receive some equipment that is manufactured in other countries.  The deliveries to the east coast support our equipment dealers in the east and central parts of the US.  Delay in receiving this equipment will create challenges in supplying our customers."

A senior EXIM official says EXIM is monitoring the strike and how it could impact the bank's customers. Since 2014, EXIM has authorized more than $1.8 billion to support agricultural exports and more than 80% of the agricultural exports supported by EXIM were associated with small businesses, they say. At this time, no ag sector customers have reached out for assistance. 

Brian Brophy, associate vice president for Stifel who covers the ag equipment industry, says while he hasn’t heard anything specific yet in terms of the impact the strike will have on ag OEMs and dealers, when the COVID supply chain issues happened Deere and other OEMs spent “significantly more on air freight to get the parts needed.” That was a different time, however, with tight inventories. “Given the inventory challenges the industry has currently, the OEMs may use this as an opportunity to clear inventory and reduce production.” 

“The ILA port strike is concerning. Fortunately, equipment manufacturers have learned valuable lessons from past supply chain disruptions, including the pandemic and major infrastructure challenges like the Francis Scott Key Bridge collapse in Baltimore,” said Curt Blades, senior vice president, Agriculture Services & Forestry with the Assn. of Equipment Manufacturers. “Our member companies have plans in place to navigate supply chain obstacles in the short term, especially for the time sensitive parts needed to ensure successful crop harvest. Manufacturers continue to work across logistics spectrum to minimize the impact on agricultural machinery and equipment availability.”

Blades adds that continued disruptions to the supply chain due to the strike could pose significant risks to the broader ag industry, especially those areas that rely heavily on containers for transport. 

“We remain hopeful for a swift resolution to the strike. A speedy recovery is essential to maintain the competitiveness of U.S. agriculture in the global market, ensuring that farmers have access to the tools they need to meet growing demands, sustain productivity and export products to other countries,” says Blades. 

Sea Intelligence estimates a 1-day strike would result in 5-day delays, while a week-long strike would leave a backlog that likely couldn’t be cleared until mid-November. Daily freight at East Coast ports is valued at $3.7 billion. 

Baltimore Port. The strike would also impact the Port of Baltimore; still recovering from the Key Bridge collapse in March 2024. At the time of the collapse, AEI reported that Baltimore, the closest to the Midwest, ranked first in the U.S. in shipping of automobiles, light trucks, farm and construction machinery. 

Baltimore handled a record 1.3 million tons of roll on/roll off farm and construction machinery in 2023. A February report from DAT Freight & Analytics noted Baltimore had become the leading U.S. port for combines, tractors, hay balers and importing excavators and backhoes.

John Deere, Caterpillar and CNH Industrial are reported to be the port’s major roll on/roll off customers, with CNH Industrial shipping 3,500-4,000 units annually from Baltimore to its overseas customers. 

Click here for more Industry News.