Lateral variability is a fundamental feature of channel-shoal estuaries, and exchanges between the channel and shoal can play an important role in the dynamics of the ecosystem in each region. This lateral exchange of biomass interacts with vertical structure and variability, particularly in the channel, to define algal biomass accumulation in the estuary. In this paper, we investigate how time-variable lateral exchange affects phytoplankton dynamics with a biophysical model that links two water columns via intermittent exchange. We find that time variability in the exchange influences biomass by increasing concentrations in the shoals and decreasing them in the channel when the time variability happens on a timescale greater than the timescales of biological processes, and the strength of the effect increases with the period of the intermittency. At timescales of variability comparable to the spring-neap cycle, however, the interplay between lateral exchange and the ecosystem response is complicated by the fortnightly development of stratification in the channel and the role that channel-shoal interaction plays in defining that stratification. As a result, for lateral exchange variability with periods of 7 and 14 days, the influence of the shoal ecosystem on the channel ecosystem is sensitive to the phasing of exchange relative to the spring-neap cycle, due to the fact that neap tide exchanges can create stratification events that are larger in magnitude and duration than would occur in the absence of lateral exchange, causing the channel to transition into net positive growth conditions. We conclude that lateral exchange influences the estuarine ecosystem both directly, through the exchange of biomass between shoals with net positive growth and adjoining channels and indirectly through its role in defining stratification events that allow the channel itself to have net positive growth.