Major ports on Canada’s West Coast, including Vancouver’s largest container port and the Port of Prince Rupert, were closed by a labor strike on Monday.
The International Longshore and Warehouse Union Ship & Dock Foreman Local 514 went on strike Monday morning, stopping containers and cargo immediately. According to the Greater Vancouver Board of Trade, $800 million in trade flows through West Coast ports every day.
About 20% of US trade goes to the Canadian ports of Vancouver and Prince Rupert, where strikes broke out after union leaders and industry representatives failed to reach an agreement before the cooling-off period expired. ILWU Local 514’s contract expires on March 31, 2023, with 96% of union members voting to strike in September.
This attack comes on the heels of recent attacks that still hit the country’s second largest port, the Port of Montreal (Prince Rupert is Canada’s third largest port). Montreal handles 40% of all East Coast container traffic. Both terminals have been blocked since Thursday when a strike was announced by the Canadian Union of Public Employees (CUPE) Local 375.
The United States is Canada’s largest trading partner. Containers filled with footwear, apparel, auto parts, chemicals, and lumber are just some of the top products that enter the Port of Vancouver and use Canadian rail or trucks to enter the US.
According to the US Department of Transportation, rail cross-border trade between Canada and the US accounted for 14% of total bilateral trade of $382.4 billion in the first half of the year. About $572 million in container trade arrives daily in the U.S. from Canada, according to U.S. Census data.
The closures at the ports of Vancouver and Prince Rupert are expected to have a significant impact on many chemical importers, said Eric Byer, CEO of the Alliance for Chemical Distribution, especially for companies that use the rail network. Kansas City Pacific Canada and Canadian National Railways out of this port to ship goods to the Midwest. Specialty chemicals moving through Vancouver include caustic soda, ethylene glycol, and sodium chlorate. These chemicals have several important uses, including water treatment, plastics, solvents, paper, pesticides, cleaning products, and de-icing products.
Logistics executives are concerned about the impact of strikes, pointing to a 13-day strike by the International Longshore and Warehouse Union of Canada in July 2023. It will take at least three months for cargo movements to the US to return to normal. Delays for rail containers are anywhere from 39 to 66 days, not including delays on ships awaiting processing.
“Vancouver processes a large number of ocean containers that move via rail to the US,” said Paul Brashier, vice president of global supply chain for ITS Logistics. “Like last year, a quick resolution to this dispute is needed as it will impact many supply chains that need goods for manufacturing and the peak holiday retail season to replenish.”
Trade data recorded by the Port of Vancouver shows that the port handled significant container growth in the first half of 2024, increasing by 14% to 1.8 million twenty-foot equivalent units (TEUs.) The volume of loaded container imports increased by 19%, to 930,300 TEUs, while the export of loaded containers increased by 4% to 412,100 TEUs. About $840 million worth of export and import cargo passes through the port every day.
Imports rose as retailers stockpiled supplies ahead of schedule, anticipating potential labor disputes, including a recent US East Coast strike that led to trade diversions, and changes in trade routes caused by the Red Sea strike and avoidance of those waters by global shippers. .
A temporary loss of the Canadian West Coast trade gateway can push carriers to discharge imported cargo along the already strained US West Coast, said Alan Baer, ​​CEO of OL USA, further increasing the dwell time of containers and elongating overall transit. The Port of Vancouver provides Midwest importers of choice for the diverse Asia-to-US supply chain.
Ships were diverted to US West Coast ports during the last strike, but now ports in Los Angeles and Long Beach, California, are experiencing longer wait times for rail-bound containers as a result of East Coast strike diversions, as well as lithium. ion battery fire on September 26 caused by an overturned tractor trailer which burned for days, temporarily closing the port.
“That’s enough!” Steve Lamar, CEO of the American Apparel and Footwear Association, wrote in an email statement. “Logistics networks have been severely stressed, with the Houthi attack still diverting global trade and the threat of an East Coast attack pushed to mid-January. Lockdown of more than 700 employees at the port of British Columbia, organized by an attack on two terminals in the port. Montreal and the time of high rail two year on the US West Coast, will cause significant disruption to North American supply chains as we approach the holiday shopping season.
The British Columbia Maritime Employers Association said in a statement that it began locking out foremen as a “defensive” measure after ILWU Local 514 issued a 72-hour strike notice over what the union described as “limited work action,” with forepersons. and other local 514 members locked out starting with the 4:30 pm shift on Friday and continue until further notice, with the exception of grain and cruise operations.
Talks between the two sides are being led by the Federal Mediation and Conciliation Services (FMCS) but have stalled, with automation among the issues blocking a deal. Port operator DP World Canada is proposing to implement a remote-controlled rail-mounted crane at its Vancouver terminal. Frank Morena, President of ILWU Local 514, said in a statement that DP World Canada had previously reached a “manning agreement” with ILWU Local 500 regarding the crane, “but refused to do so directly with Local 514.
Automation remains a key issue in negotiations between US East Coast ports and port management with a mid-January deadline to reach a deal or face another strike.
The BCMEA’s last offer before the strike included a 19.2% wage increase, a lump sum payment of about $21,000 (CAD) per eligible foreperson – combining signing bonuses and retroactive pay until April 2023 – with all retroactive salaries and bonuses to be forfeited by mid-December. It also includes pension allowance of 15% and meal allowance of 47%.
In a final statement sent to X about the negotiations on November 2, Canadian Labor Minister Steven MacKinnon said, “I have spoken with BCMEA and ILWU 514 about negotiations for a new collective agreement. The federal mediator is on site, ready to help. It is the responsibility of the parties to get a deal.
