Companies serving the U.S. agricultural sector are bracing for trade disruptions early this year by frontloading imports and diverting shipments to ease the impacts of another possible port strike and potential tariff hikes.
Cargo volumes at many U.S. ports in November were significantly higher than 2023 equivalents. The South Carolina Ports Authority, which owns and operates Charleston’s seaports, reported 5% more cargo than last year. Georgia’s Port of Savannah had nearly 15% more this November.
On the West Coast, the surge has been even more pronounced. The Northwest Seaport Alliance, which manages cargo operations at Washington’s ports of Tacoma and Seattle, saw volumes jump 25%. The Port of Long Beach and Port of Los Angeles numbers were up 16%.
December’s numbers could set new records when they’re released later this month, Executive Director at the Port of Los Angeles Gene Seroka told reporters at a media briefing before the holidays, with larger import volumes driving much of the growth.
Domestic consumer spending is up slightly on last year, fueling U.S. imports. But Seroka said that mounting trade uncertainties — an ongoing East Coast labor dispute and tariff anxieties among them — are also contributing to higher import volumes.
Donald Trump will take office on Jan. 20 after campaigning on a promise of higher tariffs during his second term. The president-elect has already suggested he could hike duties on imports from Mexico and Canada just days into his presidency.
Executive Director at the Port of Los Angeles Gene Seroka A port strike also is looming over U.S. supply chains. East and Gulf Coast dockworkers and their employers have until mid-January to overcome an impasse in talks over automation at U.S. ports. The sides agreed to temporarily extend contact negotiations in early October after a three-day strike, but that deal expires on Jan. 15.
Negotiators for the International Longshoremen’s Association and the U.S. Maritime Alliance resumed contract talks this week. But shipping giant A.P. Moller-Maersk is already encouraging customers to ensure their containers are picked up and returned empty before the Jan. 15 deadline, according to a company statement.
Some companies have already begun shifting imports to West Coast ports to mitigate the impact of another strike.
“We’re already seeing some of that,” Scott Kelly, vice president of ocean services for the Americas at Expeditors International, said during the December press call.
Nathan Strang, director of ocean freight at Flexport, said in an email that he had seen a “moderate” uptick in shipments being redirected to West Coast ports.
Frontloading fertilizer inputs
The prospect of higher U.S. tariffs and a looming port strike has spurred some companies with ag customers to frontload imports.
Eric Byer, president and chief executive officer at the Alliance for Chemical Distribution, which represents companies in the chemicals industry, told Agri-Pulse that some of his members had begun stockpiling critical inputs in November and early December.
“You have to prepare for the worst-case scenario,” Byer said. “For our guys, it was essentially making sure they could be able to withstand — and talking to our guys, a lot of them could handle two to three weeks' worth of potential strike.”
Domestic fertilizer producers are particularly reliant on chemical imports, Byer said, and want to avoid a supply chain crunch ahead of the spring planting season.
“You look at the nitric acid and the ammonium nitrate, sulfuric acid, all those acid products that are primarily manufactured in China. Those get backlogged and you can't get them over here,” Byer said. “[If] you can't get them in now and you miss the opportunity to manufacture and get it out, distribution-wise, and into the hands of farmers by spring, you're going to be in trouble.”
The U.S. is also a major importer of finished fertilizer products. Around 35% of U.S. fertilizer imports come through Gulf Coast ports and 10% through East Coast facilities, Veronica Nigh, senior economist at The Fertilizer Institute, told Agri-Pulse. While the bulk of the shipments come through private terminals unaffected by the labor dispute, according to TFI Vice President for Government Affairs Ryan Bowley, these imports would be particularly exposed to tariff hikes.
Veronica Nigh, senior economist at The Fertilizer Institute.Canadian products meet around 98% of U.S. potash demand and supply a sizeable share of U.S. nitrogen, Nigh said. New tariffs on the U.S.’ northern neighbor would likely raise prices.“We are very concerned in that realm,” Nigh said. She noted that it’s too early to tell whether fertilizer importers have ramped up purchases ahead of Trump’s inauguration but added that U.S. distributors have previously pre-positioned potash products in the U.S. ahead of supply chain disruptions.
Angie Setzer, a partner at Consus Ag Consulting, told Agri-Pulse that she knew of several growers that have acted on retailers’ advice to ramp up chemical and fertilizer purchases ahead of Trump’s inauguration.
“It's something that's in the back of everyone's mind. And there are some people that are obviously more aggressive in how they're combating it or reducing the risk that they have,” Setzer said.
The prospect of new tariffs is also prompting some businesses engaged in cross-border purchases with Canadian suppliers to revisit contract language to clarify who would be responsible for paying the duties, Setzer said.
“For the most part, at this point, it's just kind of a conversation of being aware of the risk,” Setzer said. “Everyone's kind of in wait-and-see mode as well.”
The waiting game
For many in the ag sector, cash or storage constraints preclude frontloading imports. Producers and vendors of products with shorter shelf lives also have fewer options to get ahead of supply chain uncertainties.
Frozen meat exporters, for example, can divert shipments to the West Coast or the Port of Montreal, Joe Schuele, vice president of communications at the U.S. Meat Export Federation, told Agri-Pulse. But “if it's chilled product going to Europe or the Middle East or even to the Caribbean, diverting to the West Coast is not a great option.”
Reorganizing supply chains, even temporarily, comes with added costs. Many in the fresh produce sector — already beset with tight profit margins — would prefer to wait out a potential strike.
Brandon Ruppert, vice president of export at Cohen Produce Marketing, a logistics provider for produce commodities, told Agri-Pulse that he had offered to make alternative arrangements to ensure overseas customers continued to receive goods during the October port strike, but most declined.
“They weren't interested in really pushing to get what they needed at a higher price and so we kind of just had to wait it out,” Ruppert said, adding that customers are taking a similar approach this time around. “We just kind of have to deal with it as it happens.”
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