The US Chamber of Commerce has urged Biden to step in to avert a looming port strike as an agriculture organisation warned of the economic consequences.
“We call upon the administration to immediately work with both parties to resume contract negotiations and ensure there is no disruption to port operations and cargo fluidity,” the Chamber wrote in a letter to Biden on behalf of a raft of industry associations from meat to dairy, fresh produce and frozen foods.
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“We encourage the administration to provide any and all support to the parties in their negotiations so they can reach a final agreement before the current contract expires.”
The American Farm Bureau Federation suggested in a report that disruption at the East and Gulf Coasts ports, if a 1 October strike is not averted, could cost the economy billions of dollars in agri-food exports and imports.
“Over a one-week period, the potential value of disrupted containerised ag exports is estimated at $318m,” the Federation noted amid the proposed strike by members of the International Longshoremen’s Association (ILA).
The industrial action is likely to go ahead if an agreement with the United States Maritime Alliance (USMX) cannot be reached before the current ILA member contracts expire on 30 September.
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By GlobalDataA strike would have “far-reaching effects”, the Federation said.
“Collectively, the value of containerised agricultural products passing through ILA-controlled ports, including both imports and exports, exceeds $1.4bn per week,” it suggested.
Aside from food manufacturers, farmers and agriculture businesses, a plethora of other industry associations were represented in the letter to the president from the US Chamber of Commerce, including wholesalers, retailers, importers, exporters, distributors, transportation and logistics providers.
“As we have seen with previous supply chain-related negotiations, the only way the parties can reach an agreement that will ensure their continued global competitiveness and that of the supply chain stakeholders that rely upon them is to remain at the table until a new agreement is finalised,” the Chamber wrote in the letter.
The American Farm Bureau Federation explained that the proposed strike would only impact US ports with ILA workers, on the East and Gulf coasts.
Even so, it said about 46% of containerised agricultural exports, equivalent to 16.6m metric tons, leave the US from the East Coast ports.
Nine of those account for almost 94% of the figure stated, led by Norfolk and Savannah: “In total, approximately 14% of all US waterborne agricultural exports, by volume, would be at risk in the event of an ILA strike,” the Federation warned.
More specifically, Savannah accounts for almost 50% of East Coast containerised poultry exports, it said.
“Nearly 80% of waterborne poultry exports would be jeopardised, lowering prices for poultry producers as they lose vital market access. Additionally, impacts to poultry production would create upstream effects for feed suppliers, especially those producing corn and soymeal, which are essential feed ingredients for broiler operations,” the Federation explained.
“In addition, a strike at these ports would also disrupt significant quantities of other agricultural exports, including hay, cotton, red meat, vegetables, dairy products and edible nuts.”
The Federation added that disruption at the East and Gulf coast ports, would also “create backlogs of exports, denying farmers access to a higher price in the world market, leading to a domestic oversupply, driving down prices for key commodities including meat and poultry, cotton, soybeans and speciality crops and further eroding farm profitability”.
And shortages and delays could also raise prices for consumers, too, especially for items such as perishable products, the trade organisation said.
In terms of imports, “containerised products play a much more significant role, representing 73% of all waterborne agricultural imports”, according to the Federation’s estimates.
The East Coast ports handle about 72%, or 30m metric tonnes, of such goods, the most important being New York, Philadelphia and Houston.
It added: “In total, 53% of US waterborne agricultural imports, by volume, could be affected by an ILA strike, leading to a potential economic impact of over $1.1 billion per week.”
