*

Tentative deal includes a 62% wage hike over six years -

sources

*

Strike affected 36 ports, causing backlog of anchored

ships

*

Biden applauds "critical progress towards a strong

contract"

(Adds background, retail federation statement, labor secretary

at talks in paragraphs 7-8, 12, 15, 17)

By Doyinsola Oladipo and David Shepardson

NEW YORK/WASHINGTON, Oct 3 (Reuters) - U.S. dock workers

and port operators have reached a tentative deal that will

immediately end a crippling three-day strike that has shut down

shipping on the U.S. East Coast and Gulf Coast, the two sides

said in a statement on Thursday.

The tentative agreement is for a wage hike of around 62%

over six years, two sources familiar with the matter told

Reuters, including a worker on the picket line who heard the

announcement. That would raise average wages to about $63 an

hour from $39 an hour over the life of the contract.

The International Longshoremen's Association (ILA)

workers union had been seeking a 77% raise while the employer

group - United States Maritime Alliance (USMX) - had previously

raised its offer to a nearly 50% hike.

The deal ends the biggest work stoppage of its kind in

nearly half a century, which blocked unloading of container

ships from Maine to Texas and threatened shortages of everything

from bananas to auto parts, triggering a backlog of anchored

ships outside major ports.

The union and the port operators said in a statement that

they would extend their master contract until Jan. 15, 2025 to

return to the bargaining table to negotiate all outstanding

issues.

"Effective immediately, all current job actions will cease

and all work covered by the Master Contract will resume," the

statement said.

Among key issues that remain unresolved is automation that

workers say will lead to job losses.

Union boss Harold Daggett said previously that employers

such as container ship operator Maersk and its APM

Terminals North America had not agreed to demands to stop port

automation projects that threaten jobs.

U.S. President Joe Biden's administration has sided with

the union, putting pressure on the port employers to raise their

offer to secure a deal and citing the shipping industry's bumper

profits since the COVID-19 pandemic.

The tentative deal "represents critical progress towards a

strong contract," Biden said on Thursday.

His administration has repeatedly resisted calls from

business trade groups and Republican lawmakers to use federal

powers to halt the strike - a move that would undermine

Democratic support among unions ahead of the Nov. 5 presidential

election.

Acting Secretary of Labor Julie Su was in New Jersey all day

with the two parties working to get a deal done, a source told

Reuters.

'GOOD NEWS'

The ILA launched the strike by 45,000 port workers, its

first major work stoppage since 1977, on Tuesday after talks for

a new six-year contract broke down.

At least 45 container vessels that have been unable to

unload were anchored outside the strike-hit East Coast and Gulf

Coast ports by Wednesday, up from just three before the strike

began on Sunday, according to Everstream Analytics.

JP Morgan analysts have said the strike would cost the

U.S. economy around $5 billion per day.

The strike affected 36 ports - including New York,

Baltimore and Houston - that handle a range of containerized

goods.

"The decision to end the current strike and allow the East

and Gulf coast ports to reopen is good news for the nation's

economy, National Retail Federation said in a statement. "The

sooner they reach a (final) deal, the better for all American

families."

Economists have said the port closures would not

initially raise consumer prices because companies had

accelerated shipments in recent months of key goods. However, a

prolonged stoppage would have eventually filtered through, with

food prices likely to react first, according to Morgan Stanley

economists.