U.S. Ports Strike Resolution: Economy Back on Track

U.S. East and Gulf Coast ports reopened after a strike ended with a significant wage deal for dockworkers. While the end of the strike alleviated economic risks, it caused brief disruptions in supply chains and affected global shipping stocks. The resolution has political implications ahead of the upcoming U.S. presidential election.

After a significant disruption to the U.S. East and Gulf Coast ports, operations resumed on Friday. Dockworkers and port operators reached a wage agreement, concluding the largest work stoppage in decades. However, easing the cargo backlog could take weeks, noted shipping platform Xeneta.

The International Longshoremen's Association and United States Maritime Alliance settled on a 62% wage increase over six years. The pay rise raises average workers' earnings to around $63 an hour, up from $39. The strike, involving 45,000 workers, had halted operations at 36 ports, causing an estimated economic loss of $5 billion per day.

Retailers like Walmart and IKEA, reliant on these ports, faced inventory challenges as the strike threatened supply chains. Shipping stocks dropped globally after the agreement's announcement, impacting companies like A.P. Moeller-Maersk and Hapag-Lloyd. Politically, the disruption posed headaches for President Biden ahead of the electoral showdown between Kamala Harris and Donald Trump.

(With inputs from agencies.)