Major ports on Canada’s west coast, including Vancouver’s largest container port and the Port of Prince Rupert, were closed on Monday as workers went on strike.
The International Longshore and Warehouse Union Ship and Dock Foreman Local 514 began a strike Monday morning, immediately halting containers and cargo. According to the Greater Vancouver Board of Trade, $800 million in trade flows through West Coast ports every day.
About 20% of U.S. trade arrives at the Canadian ports of Vancouver and Prince Rupert, where strikes broke out after union leadership and industry representatives failed to reach an agreement before a cooling-off period expired. The ILWU Local 514 contract expires on March 31, 2023, and 96% of union members voted in favor of a strike in September.
The strike follows recent strikes that are still affecting the Port of Montreal, the country’s second-largest port (Prince Rupert is Canada’s third-largest port). Montreal handles 40% of the East Coast’s container traffic. Both terminals have been blocked since Canadian Union of Public Employees (CUPE) Local 375 announced a strike Thursday.
The United States is Canada’s largest trading partner. Containers filled with shoes, clothing, auto parts, chemicals and lumber are just some of the top products entering the Port of Vancouver and being shipped into the United States using Canadian rail or trucking
According to statistics from the U.S. Department of Transportation, cross-border rail trade between Canada and the United States accounted for 14% of the total bilateral trade of $382.4 billion in the first half of the year. According to U.S. Census data, approximately $572 million in container trade arrives in the United States from Canada every day.
Jena Santoro, senior manager of intelligence solutions at Everstream Analytics, said any disruption at the Port of Vancouver would have the most significant impact on imports destined for western U.S. markets. “Vancouver is an important entry point for perishable food items such as dairy, produce and seafood, as well as manufactured goods such as auto parts.”
Eric Byer, CEO of the Chemical Distribution Alliance, said the closure of the ports of Vancouver and Prince Rupert is also expected to have a significant impact on many chemical importers, particularly those using Vancouver and Prince Rupert. Princeton Rail Network Company. Canadian Pacific Kansas City and Canadian National Railway From these ports goods are shipped to the Midwest. Specific chemicals passing through Vancouver include caustic soda, ethylene glycol and sodium chlorate. These chemicals are used in a variety of important applications, including water treatment processes, plastics, solvents, paper, pesticides, cleaning products and de-icing products.
Logistics executives expressed concern about the impact of the strike, pointing to a 13-day strike in July 2023 by the Canadian International Longshore and Warehouse Union. Delays for rail containers ranged from 39 to 66 days, excluding delays for vessels awaiting processing.
“Vancouver handles a large volume of ocean freight containers shipped by rail to the U.S.,” said Paul Brashier, vice president of global supply chain at ITS Logistics. “As was the case last year, this dispute needs to be resolved quickly as it will have a significant impact on many goods needed for manufacturing and the holiday retail season.” Negative impact on replenishment supply chain.”
Trade data recorded by the Port of Vancouver shows a significant increase in the number of containers handled by the port in the first half of 2024, up 14 per cent to 1.8 million twenty-foot equivalent units (TEU). , while fully loaded container exports increased by 4% to 412,100 TEU. It is estimated that US$840 million in import and export cargo passes through the port every day.
A surge in imports is expected as labor disputes are brought forward as retailers replenish inventories, including recent strikes on the U.S. East Coast that diverted trade, and attacks in the Red Sea have led to continued changes in trade routes and global shippers avoiding those waters.
Alan Baer, chief executive of OL USA, said the temporary loss of Canada’s West Coast trade gateway could prompt carriers to unload cargo along the already tight U.S. West Coast, further increasing container dwell times and extending overall transit times. The Port of Vancouver offers Midwestern importers options to diversify their supply chains from Asia to the United States.
During the last strike, ships were diverted to U.S. West Coast ports, but ports in Los Angeles and Long Beach, Calif., are currently experiencing longer wait times for rail containers due to recent east coast strike diversions and the impact of lithium batteries. An ion battery fire sparked by an overturned tractor-trailer burned for days and temporarily closed the port.
Santoro said that in addition to delays in Los Angeles-Long Beach, rerouting ships to U.S. West Coast ports could lead to increased congestion and lead to cargo processing backlogs at other ports such as Seattle and Oakland.
“Enough is enough!” American Apparel & Footwear Association CEO Steve Lamar wrote in an emailed statement. “Logistics networks are under strain, Houthi attacks are still diverting global trade, and the threat of an East Coast strike has been postponed until mid-January. More than 700 employees at British Columbia ports are on lockdown, and there are strikes at the port’s two terminals. As the holiday shopping season approaches, Montreal’s high-speed train suspension and its two-year dwell time on the U.S. West Coast will cause serious disruptions to North American supply chains.
The Maritime Employers Association of British Columbia said in a statement that it began blocking foremen as a “defensive” measure after ILWU Local 514 issued a 72-hour strike notice, in what the union called “limited work action.” 514 members are on lockdown starting Monday at 4:30 p.m. shift until further notice, with the exception of grain and cruise operations.
Negotiations between the two parties, led by the Federal Mediation and Conciliation Service (FMCS), have stalled as automation issues have hampered an agreement. Port operator DP World Canada is proposing to install remotely controlled rail-mounted cranes at its Vancouver terminal. ILWU Local 514 president Frank Morena said in a statement that DP World Canada had earlier reached a “staffing agreement” with ILWU Local 500 for the cranes, “but declined to do so directly with Local 514 this agreement”.
Automation remains a key issue in ongoing negotiations between U.S. East Coast ports and port authorities, with a mid-January deadline to reach an agreement or face another strike.
BCMEA’s final offer before the strike included a 19.2% wage increase, a one-time payment of approximately $21,000 Canadian dollars (CAD) per qualified foreman – including a signing bonus and retroactive pay through April 2023 – all retroactive pay and Prizes will be awarded by mid-December. It also includes a 15% increase in retirement benefits and a 47% increase in meal allowances.
In his last statement on the negotiations to X on November 2, Canadian Labor Minister Steven MacKinnon said, “I have spoken with the BCMEA and ILWU 514 regarding negotiations for a new collective agreement. Federal mediators are on site and ready to assist parties responsible for reaching an agreement.
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