Source: Vancouver Sun; CBC; Toronto Star
Date: 13th July 2023
Clearing the multibillion-dollar backlog of cargo could take more than two months.
B.C. port customers have started the scramble to clear a multibillion-dollar backlog of cargo that piled up during the 13-day strike that ended with employers and the union agreeing to a tentative four-year settlement on Thursday.
Once that is done, which could take more than two months, Canada’s trade sector will be looking to the ports, port workers and governments to work on longer-term stability for the critical gateways so they don’t have to anticipate a repeat in 2027.
I think a lot of people were expecting a little bit more robust and timely action as we’ve seen in previous service outages.
In 2021, for instance, the federal government tabled back-to-work legislation after one day in a port of Montreal strike. We weren’t really expecting this to drag on this long.
At Deltaport, operators GCT Terminals Canada expect a recovery of its operations will take “weeks, not months,” based on the surge capacity it built into the facility in a 2018 expansion.
We didn’t think we’d stress-test it that much since, but everything from fires to blockades to COVID to this, we sure stress-tested it.
The B.C. Maritime Employers Association and International Longshore and Warehouse Union of Canada started negotiations in April and “there didn’t seem to be a lot of public-facing action or even a sense of urgency until the strike happened.
The ILWU’s 7,400 members walked off the job on July 1 over demands related to contracting out of maintenance work, automation and wages.
This week, the federal Labour Minister said the differences between the parties’ positions were “not sufficient to justify a continued work stoppage,” and called in a federal mediator to recommend terms for a settlement.
The federal Labour Minister then gave the employers and unions until 10:30 a.m. Thursday to accept or reject those terms, though he didn’t hint at consequences for failing to agree.
The B.C. Maritime Employers Association was the first to issue a statement that a four-year tentative agreement had been reached, though no terms were released ahead of ratification votes.
The federal Labour Minister and Transport Minister, in a joint statement, acknowledged the scale of the nearly two-week strike was significant, demonstrating “just how important the relationship between industry and labour is to our national interest.”
“Deals like this, made between parties at the collective bargaining table are the best way to prevent that (and) preserve the long-term stability of Canada’s economy,” the statement said. “But we don’t want to be back here again.”
University of B.C. labour expert praised the federal Labour Minister for a “good sense of timing” with the action and for not negotiating in the media.
“He told the parties they had 24 hours. We don’t know what the alternative to that was, and that’s a very good idea,” said a professor in labour relations.
From the perspective of Canadian exporters, companies are relieved the crisis is over, but it will take months of work to add up the costs of the disruption, said the CEO of Canadian Manufacturers and Exporters.
“This is why we need reforms that will avoid a complete shutdown of Canada’s transportation system and supply chains every six months,” Canadian Manufacturers and Exporters said.
The Greater Vancouver Board of Trade estimated that as of Wednesday there are 63,000 shipping containers stuck on ships waiting at B.C. ports to be unloaded.
It is estimated that the strike, the longest work stoppage at the port in 40 years, disrupted some $9.7 billion in trade.
It is going to be a bit of a waltz to unravel the backlog, between unloading ships into empty import yards in order to make way for export cargoes from yards that are “bursting at the seams with loaded containers waiting to go out.”
The Port of Vancouver said in a statement that ILWU workers were expected to start coming back to terminals as of 4:30 p.m. Thursday as the port authority begins implementing a recovery plan in conjunction with shipping lines, railways and terminal operators.
“The plan will apply a priority-based allocation system to balance the needs of all business sectors and commodities to restore full port operations and fluidity,” the statement read.
The perishable goods such as agricultural imports and exports, were among shipments given critical priority the last time a trade was disrupted during the natural disasters of November 2021.
Following the strike, it was estimated the import side of the trade will be “the biggest cleanup,” because those are the containers that need to go out to make room.
At the same time, you’ve got containers piled up at railway hubs across the country that are waiting to get loaded on rail cars. Some shippers were able to divert cargoes to U.S. ports by truck, but American ILWU members were also refusing to handle containers they could identify were attempting to skirt the Canadian work stoppage.
Longer term, it is likely that “some diversification” will happen among shippers to avoid the risk of future disruptions.
Overall, the Canadian supply chain’s reputation has been portrayed in a positive manner from this incident.