Potential strike could impact soybean shipments

September 19, 2024 | Jeff Hutton

The export of soybeans and other ag products could be in jeopardy of reaching their destinations if thousands of dockworkers along the East and Gulf Coasts hit the picket lines and go on strike.

The International Longshoremen’s Association (ILA) is seeking higher wages and a ban on the automation of cranes, gates and container movements that are used in the loading or loading of freight at 36 U.S. ports.

“If an agreement is not reached between the ILA and the U.S. Maritime Alliance (USMX) by Oct. 1, containerized exports of soybeans and other agricultural products would be impacted,” says Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), which promotes a cost effective, reliable and competitive transportation system.

Serious impact

While bulk exports of soybeans and other agricultural products would not be directly compromised by any potential strike or lockout if an agreement is not achieved by the ILA and USMX, containerized cargo would, Steenhoek says. 

According to the U.S. Department of Agriculture, in 2023, exports of U.S. soybeans via container were significant.

Consider the numbers:

• Soybean exports via Norfolk, Va.: 1,616,854 metric tons
• Via New York/New Jersey: 372,110 metric tons
• Via Baltimore, Md.: 324,500 metric tons
• Via Charleston, S.C.: 217,892 metric tons
• Via Wilmington, N.C.: 47,744 metric tons
• Via Savannah, Ga.: 43,710 metric tons
• Via Houston, Texas: 24,758 metric tons

The Mississippi Gulf region (near New Orleans) is the No. 1 export region for soybeans, according to Steenhoek. In 2023, 27 million metric tons of soybeans were exported from the region – all of which occurred via bulk and not container.

“We are starting to see agricultural exporters explore other routes (such as the West Coast), which will most likely be at a higher cost and longer transit time,” he says. “This potential strike would be one more cost intrusion into the agricultural supply chain. Some companies and facilities are better positioned to pivot from one coast to another, while many others are in such close proximity to the East Coast that shifting volumes to another route is simply not feasible.”

And while the vast majority of soybean exports occur via bulk, containerized exports are significant to the profitability of the U.S. soybean industry.

“They are obviously critical for those farmers and companies that utilize them,” Steenhoek says, adding that containerized shipping allows the industry to access particular international customers with particular demands such as smaller shipment sizes, traceability, identify preservation, etc.

“Given the many challenges confronting agriculture, now is most certainly not the time to have a port disruption further impede the ability for farmers to be profitable,” he says.

Strike woes

The current negotiations between the ILA and the USMX relates to the current six-year contract, which expires Sept. 30, that covers approximately 25,000 dockworkers employed in container and roll-on/roll-off (i.e. automobiles, tractors and other mobile machinery) operations at these numerous ports, says Steenhoek.

In an Associated Press article, officials say that if a strike were resolved within a few weeks, consumers probably wouldn’t notice any major shortages of retail goods. But a prolonged strike would hurt the U.S. economy. Even a brief strike would cause disruptions. Heavier vehicular traffic would be noticeable at key points around the country as cargo could be diverted to West Coast ports, where workers belong to a different union not involved in the strike. And when and if the longshoremen’s association returned to work, a ship backlog would likely result. For every day of a port strike, experts say it takes 4-6 days to clear up.

“I think everyone’s a bit nervous about it,” says Mia Ginter, director of North America ocean shipping for C.H. Robinson, a logistics firm.

The ILA and the USMX have not met to negotiate since June with no further national contract talks scheduled between now and the end of the month.

Harold Daggett, the ILA president, warns the dock workers are ready to strike once their contract expires.

“We are very far apart,” he says. “Mark my words, we’ll shut them down Oct. 1 if we don’t get the kind of wages we deserve.”

Top-scale port workers now earn a base pay of $39 an hour or just more than $81,000 a year. But with overtime and other benefits, some workers can make in excess of $200,000 annually, according to the AP.

The USMX says it wants to resume talks and avoid the first national longshoremen’s strike since 1977.

“We need to sit down and negotiate a new agreement that avoids an unnecessary and costly strike that will be detrimental to both sides,” the USMX says in a statement.

Steenhoek says the next several days are critical for both sides, as well as for soybean producers and those in the ag supply chain.

“A strike would impact the soybeans, soybean meal, and other agricultural products that are exported via container. It also would have a significant impact on chilled or frozen meat, eggs, and other products that are exported from the United States,” he says. “Of course, the U.S. livestock industry cannot be harmed without simultaneously harming soybean and grain farmers. We therefore strongly encourage both parties to come to an agreement that hopefully benefits both sides without any disruption of service.”

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