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Canadian ports strike is over, but it will take weeks for supply chain to recover – UnlistedNews

A gantry crane stands at the DP World Ltd. terminal at Port Metro Vancouver in Vancouver, British Columbia, Canada, on Wednesday, September 19, 2018.

Darryl Dick | Mayor Bloomberg | fake images

The strike at Canada’s west coast ports has ended after both the union and port ownership agreed to an agreement presented by federal mediators. But undoing the damage to the supply chain from the nearly two-week strike will take time.

In a tweet, Canadian Labor Minister Seamus O’Regan said: “The scale of this disruption has been significant.”

The International Longshore and Warehouse Union of Canada begins its strike on July 1. Negotiations between ILWU Canada and the British Columbia Maritime Employers Association were tense, but O’Regan saw the differences as surmountable, prompting him to push federal mediators Tuesday to come forward. with a proposal that both parties could agree to.

Supply chain impacts

With no vessels serviced for 13 days, according to VesselsValue, the number of vessels waiting at Prince Rupert is four and the number of vessels waiting to enter Vancouver is nine. The combined value of floating trade on the high seas is $7.5 billion. There were more ships waiting, but they left the anchorage to head for US ports.

Vessels anchored off the ports will have to wait at least 8-9 days until they can dock and unload, according to eeSea.

In a recent HLS Trans-Pacific Market Report, the company warned customers that work stoppages at the terminals have delayed the loading and transfer of containers to the railways. “With 15% of import volume going through Vancouver and around 65% of Prince Rupert volume being shipped to US destinations, US Inland Harbor intermodal routes will be heavily impacted” he wrote.

HLS said carriers are expected to divert some imports to US West Coast ports. Carriers have canceled calls in Vancouver and Prince Rupert, which also means further cuts in vessel capacity.

The port strike has already damaged the US supply chain. In data released Wednesday, the American Railway Association reported that year-over-year Canadian rail intermodal declined nearly 50% last week as a result of the strike. The main sectors affected included forest products such as wood and wood products, oil and petroleum products, non-metallic minerals such as crushed stone, sand, stone, clay, and glass products, and chemicals. Products used in Asian paints, coatings and acids were hardest hit, according to the National Association of Chemical Distributors.

The National Association of Chemical Distributors told CNBC that its members likely have tens of millions of dollars in inventory stuck on ships outside the Port of Vancouver.

“Many of our members are rebooking through US West Coast ports with the potential for an additional 10-14 days of ground transit time due to redirection,” said Eric Byer, CEO of the National Association of Chemical Distributors. “Some products from member companies have been in the water since June 30 and others that arrived earlier this month are now not scheduled to be offloaded until early to mid-August at the earliest,” he said.

Products trapped in the water include essential food additives such as dextrose, guar gum and sorbates, citric acid (agriculture, food, cleaning/HI&I, personal care), sodium sulfite and sodium metabisulfite (water purification), dry caustic soda ( used in metalworking), cleaning food equipment and a variety of other applications, and iron oxide, which is used as a pigment. Byer said a member company has informed him that he is now planning an extended supply chain outage through October for Canada.

Billions of dollars in tied up trade

Approximately $572 million in container trade arrives in the US daily from Canada, according to US Census data. Between January 2022 and May 2023, the monthly total for US goods imported from Canada ranged from $31,000 million and nearly $41 billion. The main imports of raw materials in May included mineral fuels, vehicles and machinery related to information technology. Christmas items, sneakers, clothing and household items are also imported into Canadian ports for US companies.

The United States and Canada have a historically strong trading relationship: each country is the other’s main trading partner. About 20% of US trade arrives at 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 expiration period. reflection. The Canadian Chamber of Commerce estimates $605 million in trade moving through one of those two ports daily.

During the strike, it was estimated that it would take three to five days for every day the strike lasted for networks and supply chains to recover, according to the Canadian Railway Association. With the strike ending in its 13th day, delays for rail containers can range from 39 to 66 days. This does not include delays to vessels awaiting processing, which would add multiple additional delays.

The British Columbia Maritime Employers Association said in a statement after the settlement was announced that it “regrets the significant impact this job disruption has had on the economy, businesses, workers, customers and ultimately everyone.” We must collectively work together to not only restore cargo operations as quickly and safely as possible, but also to rebuild the reputation of Canada’s largest gateway and ensure the stability and resilience of the chain of supply for the future”.

ILWU Canada could not immediately be reached for comment.

Vessel diversions to the US continue.

There are now five ships identified by eeSea as having diverted from Vancouver to US ports: MSC Sara Elena, Ever Safety, COSCO Africa, Calandra and MSC Brunella. These five boats have been worked by ILWU US West Coast workers.

ILWU President Willie Adams visited Canada for the second time since July 4 to attend a union rally on Sunday. He told CNBC in a recent statement that union workers will not service any diverted ships, but there are situations where it is difficult for union workers to know the origin of the cargo.

Logistics managers have been able to redirect containers from Canada to the United States on ships. Changes take around five days to complete. US Customs must also be alerted and approve the container. One way the union can be alerted to diverted containers is by the number of containers being unloaded on a ship.

Vessels regularly arrive at the same ports and there is an approximate number of containers that are unloaded. If 500 containers are normally unloaded, and the current port call now has 900, it is likely that there are diverted containers on the ships. Other than that, it would be difficult for the ILWU to identify containers whose final destinations changed because union workers do not have access to container information for security reasons.

According to eeSea, the rush of vessels changing their schedules at ports and leaving Vancouver for US ports to supposedly return to Vancouver has risen to nine. The schedule may change after being unloaded at the US port service. It is likely that many of the ships that changed their schedules will not return to Canada. This was the case with the MSC Sara Elena, which was worked in Seattle. After the service, the carrier announced that she would not be returning to Vancouver, meaning Canada-bound cargo has been or will be discharged at future US ports.

Key points of contention in the talks included the allocation of work to third-party companies and wages. The ILWU has stressed that wages are not keeping up with inflation. It says the real purchasing power of longshore wages has fallen 2.5% since 2017, and longshore wages have grown more slowly than wages in the broader Canadian economy.

Terms of the agreement were not disclosed.

On Wednesday, the Bank of Canada raised its benchmark interest rate to a 22-year high of 5%, providing aggressive comments about the possibility that more increases may be needed in its effort to fight inflation, even as prices to the consumer are down from last year. tall


Sara Marcus
Sara Marcushttps://unlistednews.com
Meet Sara Marcus, our newest addition to the Unlisted News team! Sara is a talented author and cultural critic, whose work has appeared in a variety of publications. Sara's writing style is characterized by its incisiveness and thought-provoking nature, and her insightful commentary on music, politics, and social justice is sure to captivate our readers. We are thrilled to have her join our team and look forward to sharing her work with our readers.


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