A potential dock workers’ strike Oct. 1 on the East Coast and Gulf Coast would not significantly impact grain export facilities.
The contract ends on September 30, and so far, no formal negotiations have been held and none are scheduled. The strike would have limited impact on bulk grain exports, including corn and soybeans. Bulk grain export facilities would not be affected by the strike as these facilities typically operate with different labor arrangements, such as their own employees or different labor unions.
The majority of soybean and grain exports from the Gulf or East Coast would not be impacted by the negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX).
While bulk grain exports would be largely unaffected, the strike would impact containerized agricultural exports: Soybeans, soybean meal, and other agricultural products exported via containers would be affected.
In 2023, container shipments of soybeans through East and Gulf Coast ports totaled around 100 million bushels, compared to nearly 1 billion bushels of bulk soybean exports from the Gulf.
Specific containerized soybean exports that could be impacted include:
• Norfolk: 1,616,854 metric tons
• New York/New Jersey: 372,110 metric tons
• Baltimore: 324,500 metric tons
• Charleston: 217,892 metric tons
• Other ports with smaller volumes
Indirect effects on grain producers. While grain export facilities may not be directly impacted, there could be indirect effects on grain producers: The strike would significantly impact exports of chilled or frozen meat, eggs, and other livestock products, which are primarily shipped in containers. Any harm to the U.S. livestock industry would indirectly affect soybean and grain farmers, as these industries are interconnected. East and Gulf Coast ports accounted for 44% of U.S. waterborne pork exports and 29% of waterborne beef exports in the first half of this year. New York/New Jersey, Wilmington and Charleston were the largest East/Gulf ports for pork exports and Houston was largest for beef.
Of note: One industry contact emailed: “There might be some limited disruptions to bulk grain exports because of sympathy with the strikers or just general disruption at a particular location.”
Another contact emailed: “Many of the containers are going to be fulfilled by smaller to mid-size regional cooperatives and privates. Thus, the impacts will be felt more acutely, severely and quickly than in some of the larger commercials and co-ops. Also, my understanding is that around 40% of all ag containers go off east/southeast ports and 60% off west. So, we’re talking a real impact to ag.”
What could happen. The Biden administration has decided not to invoke the Taft-Hartley Act to intervene in a labor dispute, a law that allows the president to step in during serious labor conflicts when national health or safety is at risk. The Taft-Hartley Act has been invoked 37 times in the past, allowing for an 80-day “cooling off” period, but Biden officials confirmed they are not considering using it in this case. The last time it was invoked was in 2002 by President George W. Bush during a West Coast port lockout. Instead, Biden has previously opted for negotiation strategies, such as sending officials to mediate labor disputes.
Retailers are seeking some alternatives. The ports of Los Angeles and Long Beach handled a combined 966,231 loaded container imports last month, up more than 27% from a year ago and the highest volume since May 2021. West Coast ports, which lost a big share of import trade during a long stretch of congestion in the Covid pandemic, are winning back cargo. In June and July, West Coast ports handled 61% of imports from Asia, the highest share of that market since October 2021, according to transportation data firm Xeneta.
Of note: The energy industry could also be affected: Gulf Coast ports are crucial for energy exports, particularly liquefied natural gas (LNG). Any disruptions could impact the flow of energy resources. These industries are particularly vulnerable due to their reliance on timely shipments, just-in-time inventory systems, and the critical nature of their products.
Bottom line: While the potential dock workers’ strike would not directly impact bulk grain export facilities, it could have significant effects on containerized agricultural exports and indirectly affect grain producers through disruptions in the livestock industry. The potential strike would affect 36 ports along the East Coast and Gulf Coast, from Maine to Texas.
Negotiations between the two parties have stalled, with several issues remaining unresolved: wage increases, limits on port automation, and use of automated technology to process trucks without union labor. The ILA has voted unanimously to support a strike if their demands are not met. As of mid-September, the two sides appear to be far apart in negotiations.
ILA President Harold Daggett has stated, “The ILA most definitely will hit the streets on October 1st if we don’t get the kind of contract we deserve.” Last-minute agreements are not uncommon in labor negotiations, so the situation could change rapidly in the coming days.
Of note: The energy industry could also be affected: Gulf Coast ports are crucial for energy exports, particularly liquefied natural gas (LNG). Any disruptions could impact the flow of energy resources. These industries are particularly vulnerable due to their reliance on timely shipments, just-in-time inventory systems, and the critical nature of their products.
Bottom line: While the potential dock workers’ strike would not directly impact bulk grain export facilities, it could have significant effects on containerized agricultural exports and indirectly affect grain producers through disruptions in the livestock industry. The potential strike would affect 36 ports along the East Coast and Gulf Coast, from Maine to Texas. Negotiations between the two parties have stalled, with several issues remaining unresolved: wage increases, limits on port automation, and use of automated technology to process trucks without union labor. The ILA has voted unanimously to support a strike if their demands are not met. As of mid-September, the two sides appear to be far apart in negotiations. ILA President Harold Daggett has stated, “The ILA most definitely will hit the streets on October 1st if we don’t get the kind of contract we deserve.” Last-minute agreements are not uncommon in labor negotiations, so the situation could change rapidly in the coming days.
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