Agriculture Watches West Coast Port Contract Negotiations: Disruptions Have Already Shifted Shipping to the East Coast

The supply chain crunch during the pandemic put a spotlight on the backlog at West Coast ports, but a new report shows a major shift in port activity.  Data from logistics visibility platform FourKites shows that as of April 11, shows 36% of imported good arrived through West Coast ports.  That's down from 42% in the second half of last year.  The East Coast now accounts for 64% of shipments.  The shift from the West Coast to the East Coast started to occur during COVID with resulting labor shortages.  However, now it's linked to the unreliability of shipping with continued slowdowns and temporary work stoppages at the port tied to ongoing contract negotiations between the unions. 

Tensions are rising as talks continue between the Pacific Maritime Association, which represents 700 terminal operators and ocean carriers who operate at the 29 West Coast ports, and the International Longshore and Warehouse Union, which accounts for nearly 16,000 waterfront employees which perform tasks such as loading and unloading ships.  It’s something agriculture is keeping an eye on. The two have been negotiating a new five-year contract since July 1 of 2022 but work stoppages earlier this month are a red flag that talks are not progressing well.  The current contract doesn’t apply to bulk grain and soy exports from the West Coast, those are under a separate contract. 

Mike Steenhoek, Executive Director of the Soy Transportation Coalition says, "But what it does impact this contract negotiation along the west coast is the agricultural shipments that are that are occurring via container and one of the most notable examples of that is the meat industry.  A lot of meat exports and poultry exports from the United States are loaded into refrigerated containers and then they make their way to customers primarily in Asia."   

While only 4% of soybeans are exported via container., Steenhoek says any slowdown in meat exports trickles down to feed grain and soybean producers.  "If the US meat industry if the US poultry industry is harmed in any way that's going to have a detrimental impact on soybean farmers and grain farmers in the United States. So, these are two industries that are very much linked at the hip."

This is also significant for agriculture because a significant volume of fresh fruits and vegetables are exported via container from West Coast Ports. 

Steenhoek doesn’t believe we’ll see an actual strike because that would undermine the negotiations.  However, they’re urging Congress to be in on alert so they can quickly intervene, if necessary, in a similar fashion to the railroad strike last fall.