US grain and feed exporters face uncertainty as ILA strike threatens October sales

US grain and feed exporters are facing difficulties in securing export sales in October as the International Longshoremen's Association has threatened to strike and shut port operations along the East and Gulf coasts.

Containerized US agricultural and feed export products have experienced mixed impact from the potential strike. Increased volumes of containers have been routed through the US West Coast, which has lowered the immediate impact on trade prices in East and Gulf coast markets, according to a source. However, uncertainty over freight rates has impacted nearby sales activity, leaving traders irritated as they cannot commit to new positions until October shipment rates are confirmed.

Current projections suggest a potential $500 increase per 40-foot container at East Coast ports for October, along with a $100 increase for West Coast rates, according to one of the top US agricultural exporters.

The ILA's current six-year contract agreement with the United States Maritime Alliance is set to expire on Sept. 30, and the two parties have yet to reach an agreement on new contract terms. The timing of the contract renewal and the upcoming US election had caused many to anticipate government intervention to minimize trade and labor disruption.

However, an administration official said US President Joe Biden does not intend to invoke a federal law to prevent a port strike if dockworkers fail to secure a new labor contract by Oct. 1, Reuters reported Sept. 17.

With less than two weeks before the contract deadline, negotiations between ILA and USMX remained tense, with one a shipping manager of one of the largest US agricultural exporters saying: "I'd estimate current chance for a strike at 90%. Things are at a complete standstill with no conversation between the two."