After a while landslide vote of union members, ILWU Canada has sent notice of plans to strike at the country’s West Coast ports beginning July 1. The Canadian Labor Code requires three days’ notice to declare the strike. labour. The announcement was made on Wednesday.
More than 99% of ILWU Canada workers that are critical to West Coast port operations, including those in Vancouver and Prince Rupert, voted earlier this month in favor of a strike if no deal is reached. labor agreement. The vote, which took place from June 9 to June 10, took place during a 21-day break between the British Columbia Maritime Employers Association, which represents port ownership. and ILWU Canada. Two mediators appointed by the Canadian government oversaw the discussions that lasted until the end of May.
ILWU Canada said in a statement on Wednesday that its goal was to protect jobs and claimed the British Columbia Maritime Employers Association was asking for major concessions.
“Their sole goal is to strip workers of the rights and conditions of working on the coast after they have made record profits during the pandemic,” said Rob Ashton, president of ILWU Canada. “.
The BCMEA countered in a statement that it offered a variety of proposals and views, “with the goal of making progress and reaching a fair deal at the table.”
Impact on the US economy and trade
The largest port affected by this strike is the Port of Vancouver, the largest port in Canada. About 90% of the cargo moving through the Port of Vancouver is Canadian cargo, according to the Vancouver Fraser Port Authority. But there are potential implications for US trade. According to the port authority, about 15% of container trade moving through the Port of Vancouver is to or from the United States, and about 2% of international U.S. full-load imports to West Coast ports each year move through the Port of Vancouver.
According to data from the port, about two-thirds of the volume of containerized imports arriving at Prince Rupert is destined for the US market by rail.
It is estimated that Canada’s West Coast ports handle nearly $225 billion worth of cargo each year, with goods transported by rail including a wide range of consumer products, from clothing to electronics. and household goods. The strike will not affect the movement of grain ships under Canadian labor law.
Three class 1 railway lines operate at these ports, CN, Canada Pacificand BNSF, a subsidiary of Berkshire Hathaway. Railroads could not be immediately reached for comment.
The BCMEA statement said it remained open to re-engagement with the labor union through the federal mediation process. “That includes voluntarily participating in a conciliation-arbitration process shaped by the parties to encourage continued dialogue and negotiation and only, if necessary, to produce a binding outcome through arbitration in the interests of the parties.” So far, ILWU Canada has rejected this proposal for binding conciliation and arbitration,” it said.
The BCMEA said it hoped that cruise ships during the busy summer would be served, but “it is not clear at this time whether ILWU will service that segment of the industry”.
Another round of discussions is scheduled for Thursday.
The global supply chain is back to normal
The global supply chain has faced a number of new risks when peak shipping season including back-to-school orders and holiday starts. The Panama Canal has been cope with severe drought conditionswhile US West Coast ports have reached a tentative labor agreement after weeks of tension between US ILWU and port management, but that the agreement will take several months to ratify by rank and membership profile.
“We are concerned about a potential strike and its impact at the Port,” said Jon Gold, vice president of supply chain and customs policy at the National Retail Federation, in an email to CNBC. Vancouver and Prince Rupert. “Retailers have diversified their supply chains to include these important ports in Canada. A strike will lead to delays and disruptions as we enter peak shipping season. I urge the parties to continue to negotiate and continue to negotiate until an agreement is reached.”
Overall, data shows that supply chain costs have fallen significantly since the pandemic inflation shock and companies say supply chains are back closer to normal operating conditions despite recent West Coast congestion caused by ILWU and regulatory actions port before the expected agreement is signed. In a CNBC interview on Wednesday, General Mills CEO Jeff Harmening described the supply chain as “getting healthier over the last three months” and said the number of disruptions was similar. like pre-pandemic levels.
But logistics managers told CNBC that the news of the Canadian port workers’ strike was a blow to activity. “We will tow as many containers as possible before the weekend,” said Paul Brashier, ITS Logistics vice president of freight and intermodal transport. “We will then take the containers that have been tied to the rail and load the products onto dry trucks.”
Brashier said these Canadian ports are important to Midwestern manufacturers and the auto industry, as most trans-Pacific cargo enters these points before transferring to rail and heading to the railroads. domestic rails in Chicago and other major markets.
