A union representing port workers in Western Canada has officially commenced a strike, an action that could have ripple effects beyond the United States’ northern neighbor.
Longshore Federation & International Warehouse Canada’s Longshore division announced their labor strike began in a… Saturday Facebook post signed by union president Rob Ashton. More than 99% of the union’s members, who support West Coast ports like Vancouver and Prince Rupert, voted in favor of the strike. last month. The notice of the strike was made on Wednesday.
“ILWU’s Canada Coast division did not take this decision lightly, but for the future of our workforce, we had to take this step,” Ashton said in the post. “We still hope to reach an agreement through FREE Collective Bargaining!”
Ashton added that the union has been ready to negotiate since February with the British Columbia Maritime Employers Association, which represents port owners, and remains open to continuing to work under contract.
The Employers Association, known as BCMEA, said in a statement it worked to “promote proposals and positions in good faith, with the goal of reaching a fair deal at the table.” It recognizes the role of federal mediators and says it is open to “any” resolution that can bring the parties to a balanced agreement, including the mediation arbitration process.
Cruises can still travel and bulk grains are moving, but containerized grains are not. Canadian Labor Minister Seamus O’Regan Jr. tweeted seemed to favor continuing negotiations between the two groups, noting that “the best agreements for both sides are reached at the table.”
The two sides disagree on issues including automation, the use of contract work and the cost of living for workers. Two mediators appointed by the Canadian government oversaw the discussions that lasted until the end of May. Those discussions were followed by a so-called cool-down period between the two groups.
A strike in western ports that occurs over holidays in both the US and Canada could lead to an impact on the US economy, industry insiders said. The Port of Vancouver and the Port of Prince Rupert are popular destinations for U.S. commerce because they are among the major ports for cargo arriving from Asia. Several logistics managers have told CNBC that rail service out of those ports is much faster than going through the ports of Seattle or Tacoma.
According to the International Association of Seafarers will not accept redirected goods from ports with workers on strike, while the head of the International Warehousing and Coastal Union, which represents West Coast port workers in the United States, issued a declaration of solidarity with the Canadian union but no specific action was mentioned.
The strike could lead to congestion at these ports that makes it impossible for coasters to unload their ships. Congestion can become a backlog and lead to delayed receipt of goods from terminals, which can then result in late fees that are normally passed on to consumers — a similar situation. similar to what happened during the pandemic.
Paul Brashire, ITS Logistics vice president of freight and intermodal transport said: “With the Canadian public holiday and the 4th of July public holiday, container volumes are lighter than usual but for now the vessels are inactive because of the strike”. “If this strike continues through the middle of next week, it will affect congestion in the coming weeks at Chicago and Detroit rail stations as containers will build up and eventually be delivered to terminals.” that railway station.”
Canada’s ports are estimated to handle nearly $225 billion in cargo each year, with items including industries such as household goods, electronics and apparel being transported by rail. According to port authority data, about 15% of consumer trade passing through the Port of Vancouver is directed to or from the United States. Port data shows that about two-thirds of the volume of containerized cargo entering the Port of Prince Rupert is destined for the United States.
Three class 1 railway lines operate at these ports: CN, Canada Pacific and BNSF, a subsidiary of Berkshire Hathaway. In an email to CNBC, BNSF said it had no comment on the impact of the strike. CN could not be immediately reached for comment.
In an advisory to CPKC customers issued on Wednesday, the railway said: “Outages related to this announcement may affect port operations in British Columbia. I do not anticipate any significant service disruptions as a result of this outage and, as such, CPKC has not initiated sanctions regarding possible service disruptions but we are monitoring it closely. developments closely to assess any impact on shipments on CPKC’s network. We will provide updates as necessary.”
Steve Lamar, CEO of the Apparel and Footwear Association of America, told CNBC that the “fragile and resilient supply chain cannot withstand a strike”, while calling on the Canadian government help keep the parties at the negotiating table.
