Potential Strike at U.S. East and Gulf Coast Ports

By David Shepardson, Jarrett Renshaw and Karl Plume

WASHINGTON/CHICAGO (Reuters) – Agriculture organizations urged the White House to act to avert a potential Oct. 1 strike at U.S. East and Gulf Coast ports, handling about half of the country's ocean trade, including essentials like coffee, meat, and eggs.

Dozens of groups, including the American Farm Bureau Federation and the Renewable Fuels Association, stated that it is time for the U.S. government to intervene to prevent disruptions to agriculture and the economy.

Republican Senator Ted Cruz referenced a JPMorgan analysis predicting a $5 billion daily cost to the U.S. economy if a strike occurs, noting the significance of preventing a union strike at these ports for the first time since 1977.

Cruz, representing Texas and the Port of Houston, where labor talks are stalled over worker pay, cautioned about potential impacts on other busy ports like New York and New Jersey, Savannah, Georgia, and Norfolk, Virginia. This could worsen an ocean shipping network already strained by rerouting ships around Africa due to Houthi militant threats near the Suez Canal.

U.S. companies that depend on East and Gulf Coast ports are urgently seeking alternatives amid the strike threat. The current contract between the International Longshoremen's Association union, representing 45,000 port workers, and the United States Maritime Alliance, negotiating for employers from Texas to Maine, expires on Sept. 30.

A potential strike looms just weeks before the U.S. presidential election between Democratic Vice President Kamala Harris and Republican former President Donald Trump. The White House has not immediately responded to the agricultural groups' request; however, spokesperson Robyn Patterson indicated they are monitoring supply chain impacts.

President Biden's administration does not plan to invoke the Taft-Hartley Act to prevent the strike. Delays and costs from a strike could significantly impact retail, manufacturing, and food industries.

About 14% of U.S. waterborne agricultural exports would be at risk, with a potential weekly value loss of $318 million. Furthermore, 53% of U.S. waterborne agricultural imports could be affected, risking over $1.1 billion weekly.

A prolonged strike may lead to shortages of products like bananas, coffee, and cocoa, potentially raising grocery prices. Export sales of vital agricultural products such as beef, pork, chicken, and eggs could also be lost. Some consumers might benefit from lower prices in the domestic market if producers opt to sell perishable goods quickly.

In 2022, approximately $5.5 billion in U.S. poultry exports came from East and Gulf Coast ports; two-thirds of this volume was on these coasts. Sterling Smith from AgriSompo North America mentioned that while consumers might benefit marginally at the egg and meat counter, issues with coffee and cocoa could overshadow these gains.