:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2174801466-f2bec32ced5b408e9372f25a85322eb4.jpg)
KEY TAKEAWAYS
- Shares of global shipping companies tumbled Friday, as the suspension of the U.S. dockworkers’ strike reduces the possibility that snarled supply chains would lead to more global trade rerouting and boost their business.
- Shares of Danish shipping giant A.P. Moller-Maersk and Germany’s Hapag-Lloyd dropped, following declines earlier by Asian shipping lines.
- The International Longshoremen’s Association (ILA), which represents around 45,000 dockworkers, and United States Maritime Alliance (USMX) on Thursday struck a deal to return to talks and extend their expired contract through Jan. 15.
Shares of global shipping companies tumbled Friday, as the suspension of the U.S. dockworkers’ strike reduces the possibility that snarled supply chains would lead to more global trade rerouting and boost their business.
The International Longshoremen’s Association (ILA), which represents around 45,000 dockworkers, and United States Maritime Alliance (USMX) Thursday struck a deal to return to talks and extend their expired contract through Jan. 15.
Shares of European shipping giant A.P. Moller-Maersk, which warned earlier that the strike would affect supply chains, were down 5% in Danish trading Friday. Hapag-Lloyd shares plunged 13% in German trading.
Earlier in the day, Asian shippers also lost ground with China’s Cosco Shipping Holdings closing down 7% in Hong Kong trading. Both Japan’s Nippon Yusen and Taiwan’s Yang Ming Marine Transport Corp. ended trade in their domestic markets 9% lower.
Shipping Lines Reportedly Will Bear Higher Wage Costs
The three-day dockworkers’ strike shut down U.S. ports responsible for more than two-thirds of the country’s imports, disrupting supply chains and threatening to raise prices for many goods.
The tentative agreement reportedly includes a 62% bump in wages over six years, up from an earlier proposal that would have lifted workers’ pay 50% but still below the 77% raise the union had hoped for. According to The Wall Street Journal, the cost of the higher wages will be borne by both the cargo owners and also the shipping lines, with Maersk and Cosco among those operating many of the boxships at U.S. ports.