Workers agree to tentative deal on wages and contract extension

A major union for U.S. dockworkers and the United States Maritime Alliance agreed on Thursday to a tentative deal on wages and have extended their existing contract through Jan. 15 to provide time to negotiate a new contract.

The move ends a strike that had snarled East Coast and Gulf Coast ports since the beginning of the week and threatened U.S. supply of fruits, automobiles, and other goods.

“The International Longshoremen’s Association and the United States Maritime Alliance, Ltd. 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,” The International Longshoremen’s Association and the United States Maritime Alliance said in a joint statement.

During the week, the strike had already started to stress the U.S. supply chain. Thousands of containers had been dumped at the wrong ports, and billions of dollars in goods were anchored offshore because ports were not operational, CNBC previously reported. Shipping costs had already started to rise.

The strike was the first by the ILA since 1977, and it impacted operations at 14 different ports. About 50,000 of the union’s 85,000 members were on strike this week. In a statement on Tuesday, ILA President Harold Daggett said the union was asking for an increase of $5 per hour for each year of the six-year contract.

ILU wages will increase 61.5% over six years under the tentative agreement, sources told CNBC’s Lori Ann LaRocco. A central conflict over port automation is still under negotiation.