By Dean Seal

Container-shipping stocks fell Friday after U.S. dockworkers agreed to return to work with a beefed-up contract offer, nixing for now the prospects of higher freight rates.

Shares of ZIM Integrated Shipping Services fell 12% to $19.05, American depositary receipts of Germany's Hapag-Lloyd were down 16% at $77.29, while Denmark's A.P. Moller-Maersk's ADRs slid 6.2% to $7.13, echoing declines in European markets. ADRs of China's Cosco Shipping were down 4.8% at $8.08.

All four stocks had posted sharp and steady gains over the past month as negotiations between the International Longshoremen's Association and port operators broke down, resulting in a strike earlier this week that closed container ports along the East Coast and Gulf Coast.

Investors had expected the strike to increase demand for space on containerships and raise freight rates, boosting the ship operators' earnings.

The walkout ultimately lasted only three days, shorter than many observers had expected, after port employers reportedly offered a 62% increase in wages over six years, up from a prior proposal for a 50% raise.

The union and port operators said the tentative agreement would extend the prior contract, which expired at the start of this week, through Jan. 15, 2025, while the two sides negotiate on other issues, including automation on the docks.

Stifel analysts said late Thursday that they had expected the strike to last about two weeks, given how far apart the port workers and operators were on many issues, and the White House's message that it wouldn't intervene to get the ports back open.

The Biden administration privately and publicly pressed the large shipping lines and cargo terminal operators to make a new offer, according to The Wall Street Journal.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

October 04, 2024 11:11 ET (15:11 GMT)

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