The International Longshoremen’s Association and the U.S. Maritime Alliance have agreed to extend contract negotiations for 30 days, thereby averting a strike scheduled to begin December 30th. The main issue in dispute were so-called royalty payments that union workers receive in addition to their salaries for every container shipment they handle.
A federal mediator cited by MarketWatch said:
[T]he container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement.
The potential strike threatened goods arriving at East and Gulf Coast ports, and could have had a negative effect on retailers like home improvement stores The Home Depot Inc. (NYSE: HD) and Lowe’s Companies (NYSE: LOW), which view sales in the first half of the year as their most important of the year.
Shares of Home Depot are up 0.5% at 61.38 and Lowe’s shares are up nearly 0.8% on the news.