US dock workers and port operators reached a tentative agreement on Thursday, effectively ending a crippling three-day strike that had halted shipping operations along the East Coast and Gulf Coast.

According to sources familiar with the deal, the agreement includes a wage increase of approximately 62% over six years, raising average pay from $39 to about $63 per hour. A worker on the picket line also confirmed this announcement. The International Longshoremen's Association (ILA) had initially demanded a 77% wage hike, while the employer group, United States Maritime Alliance (USMX), had previously offered nearly 50%.

This deal marks the resolution of the largest work stoppage of its kind in nearly 50 years, which had disrupted container ship unloading from Maine to Texas, threatening shortages of goods such as bananas and auto parts and leading to a backlog of anchored ships at key ports.

In a joint statement, the union and port operators announced they would extend their master contract until January 15, 2025, allowing both sides to return to the bargaining table to address all remaining issues. "Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume," the statement said.

One of the key unresolved issues is the implementation of automation, which workers argue will result in significant job losses.

Biden supports union

The Biden administration had backed the union, urging port employers to increase their offer and secure a deal, highlighting the shipping industry's record profits since the COVID-19 pandemic. The tentative deal "represents critical progress towards a strong contract," Biden said on Thursday. "Collective bargaining works," he added.

The Biden administration repeatedly resisted pressure from business trade groups and Republican lawmakers to invoke federal powers to end the strike, which could weaken Democratic support among unions ahead of the November 5 presidential election.

According to sources, the White House was deeply involved in negotiations to secure a deal. After days of discussions, White House Chief of Staff Jeff Zients held a 5:30 a.m. (0930 GMT) virtual meeting on Thursday with the CEOs of ocean carriers, stressing the urgency of reopening ports to aid in hurricane recovery efforts, a source familiar with the matter revealed.

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Earlier on Tuesday, dockworkers from Maine to Texas began striking over wages and automation, risking inflation and goods shortages if the action continues for weeks.

The contract with about 45,000 members of the International Longshoremen’s Association expired at midnight, prompting the strike despite reported progress in negotiations. This is the first strike by the union since 1977, affecting 36 ports.