Potential dockworker strike would affect small percentage of soy exports

A potential work stoppage at East Coast and Gulf Coast shipping ports will not have an impact on most soybean exports, but for some exporters, the effects will be felt, according to the executive director of the Soy Transportation Coalition. The International Longshoremen’s Association (ILA), the union representing East Coast and Gulf Coast dockworkers, and the U.S. Maritime Alliance have not agreed on a new contract to replace the current one that expires October 1. The Longshoremen have threatened to strike if an agreement is not reached before October 1. Most of the impact of a strike would be on a relatively small percentage of soybeans that are exported in shipping containers, said Steenhoek. Most workers who load bulk soybean shipments into the holds of vessels are not represented by the ILA.

“The vast majority – over 90 percent – of soybean exports occur in bulk form. That’s when you’re basically loading an ocean vessel directly into its empty cargo holds with loose soybeans until those cargo holds are filled,” Steenhoek told the South Dakota Soybean Network. “That’s the vast majority of how we export soybeans and other grains from the United States.”

Even though it’s a small percentage of export shipments, a shutdown of containerized soybean shipments would still be devastating, Steenhoek said, just to a smaller section of the soybean trade.

“Containerized shipping really helps us to meet certain exporter needs and preferences but also customer needs and preferences. So, it’s something that we definitely don’t want to see disrupted at all,” he said. “It is something that is very important to our industry.”

Steenhoek points out that another way an ILA work stoppage affects soybean farmers is that most U.S. meat exports are done in refrigerated shipping containers. Those shipments would be impacted if a strike happened.

“The livestock industry is our number one customer here in the United States, and if our U.S. meat exports are impeded, you’re going to have the profitability of the U.S. soybean farmer also impeded,” said Steenhoek, “So it is very much a big deal.”

Because the bulk of South Dakota soybean exports exit to the west via rail to Pacific Northwest shipping ports, the impact of a possible strike on the state’s growers is not as direct, but Steenhoek cautions that disruptions anywhere on the soybean supply chain are likely to be felt everywhere.

“If you have a challenge all of a sudden along the East Coast of the United States, that freight is going to have to be concentrated on the remaining part of the supply chain, so you’re going to see greater congestion, greater costs,” said Steenhoek. “You expect it, but you’re always still surprised when you see that happen; how a challenge over there can have a pretty dramatic impact over here.”