European shipping firm shares drop as dockworkers temporarily end U.S. port strikes

By Louis Goss

Shares in Europe's top shipping companies fell on Friday on news the U.S. dockworker's union will be temporarily halting its shutdown of American ports until January next year.

In a statement on Thursday, the International Longshoremen's Association said it had reached a tentative agreement on wages that would see its 35,000 members resume work at ports across the U.S. East and Gulf coasts, before returning to the negotiating table on Jan. 15 2025.

See: Dockworkers union agrees to suspend port strike until Jan. 15 after tentative deal

European shipping companies would have benefited from a more prolonged strike in U.S. ports that would have let them capture a larger share of global seaborne trade.

A.P. Møller - Mærsk (DK:MAERSK.B) shares fell 7% on Friday with shares in the Danish shipping firm having previously lost 26% of their value in the year-to-date. Hapag-Lloyd (XE:HLAG) shares fell 13% on Friday having advanced 4% in the year-to-date.

The ILA said it is planning to restart negotiations with the United States Maritime Alliance at the start of 2025 over outstanding issues including the automation of port infrastructure including cranes, gates, and container moving trucks.

The United States Maritime Alliance is an organization that represents shipping companies and port operators on the U.S. Gulf and East coasts that is involved in collective bargaining with the ILA union.

"I want to thank the union workers, the carriers, and the port operators for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding," U.S. president Joe Biden said in a statement.

The ILA strike saw 35,000 union members shutdown 14 major ports and a multitude of smaller ports along America's Gulf and East coasts on Tuesday in calling for a 62.5% pay rise over the period of its next six-year master contract.

The union's previous six-year master contract that expired on Sept. 30 required ILA members be paid a minimum of $20 an hour rising to $39 an hour for dockworkers with six or more years of experience.

The ILA on Tuesday previously rejected an offer put forward by the United States Maritime Alliance that the coalition of port and shipping companies said would have increased dockworker's pay by nearly 50% over six years.

-Louis Goss

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10-04-24 0448ET

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