Shares in shipping firms dip after US dockworkers reach deal to end strike
Investing.com — Shares in AP Moeller – Maersk (CSE:MAERSKb) in Denmark and other shipping companies slipped on Friday following news that port workers in the US had ended the biggest work stoppage of its kind in almost half a century.
US dockworkers across the East and Gulf coasts suspended their days-long strike after their union and the group representing large ocean shipping firms reached an agreement on Thursday.
The labor action had closed down ports from Maine to Texas, threatening large swathes of the US economy by crimping supply chains and the imports of goods like food and pharmaceuticals. Analysts at JPMorgan had said the strike cost the economy as much as $4.5 billion a day, the Financial Times reported.
The tentative deal will see a wage hike of roughly 62% over six years, Reuters reported, citing two sources familiar with the matter. The number would be between the 77% sought by the International Longshoremen’s Association (ILA) workers union and the almost 50% offered by the employer group, United States Maritime Alliance (USMX).
In a statement, the ILA and the USMX said they would extend their master contract until Jan. 15 of next year. However, key issues between the two remain, including workers’ concerns that automation at ports could cause job losses.
Shares in shipping groups like Germany’s Hapag Lloyd (ETR:HLAG) and Switzerland’s Kuehne & Nagel (SIX:KNIN) dropped. Japanese firms Nippon Yusen (TYO:9101), Kawasaki Kisen Kaisha (TYO:9107) and Mitsui O.S.K. Lines (TYO:9104) also fell.
Investors who had been banking on a rebound in recently depressed freight rates due to the strike were selling following the announcement, analysts told Reuters.
Analysts at Vital Knowledge said the halting of the strike was “obviously positive,” but added that the impact of the resolution on broader equities will likely be “relatively minor.”
“[I]f this were week [four or more] of the stoppage, the reaction would be more bullish, but the strike is only a few days old,” they said in a note.
(Reuters contributed reporting.)