Stranded Trade: West Coast Labor Negotiations Pause, Leaving $19 Billion Worth of Goods In Limbo

Shipping containers are stacked on a dock at the Port of Vancouver on November 20, 2021. Negotiations between the British Columbia Maritime Employers Association and the International Longshore & Warehouse Union Canada's Longshore Division are currently paused. The BCMEA stated that they are ready to return to the table if a reasonable proposal is put forward by ILWU Canada. The ILWU accused the BCMEA of sabotaging progress on contracting out maintenance work. The strike has caused a backlog in trade, with 29 ports on Canada's West Coast at a standstill. The strike at the Port of Vancouver and Prince Rupert has the potential to significantly impact transpacific cargo flows. These ports typically handle an average of 34 container vessels or 289,700 TEU per month. The value of the containers currently sitting at these ports is estimated to be $19 billion based on Canadian customs data. Delays caused by the strike are expected to increase vessel transit and turnaround times, leading to congestion and processing delays. This situation is reminiscent of the challenges faced during the Covid pandemic. The strike also affects the railroads that serve these ports, including CN, Canadian Pacific, and BNSF. Logistics companies like ITS Logistics are preparing for the surge of containers that will need to be moved once a deal is reached. ILWU Canada expressed concern that the BCMEA may be avoiding negotiations by relying on back-to-work legislation. The labor minister's office is encouraging both parties to continue negotiations through mediation. In conclusion, the ongoing strike at the Port of Vancouver and Prince Rupert has far-reaching implications for businesses, particularly those that rely on transpacific cargo flows. The backlog in trade caused by the strike has led to delays in vessel transit and turnaround times, resulting in congestion and processing delays. This situation is reminiscent of the challenges faced during the Covid pandemic, where supply chains were severely disrupted. For new businesses that heavily rely on imports or exports through these ports, the strike poses a significant risk. The inability to move goods efficiently can disrupt their operations, causing delays in production, fulfillment, and customer satisfaction. The value of the containers currently sitting at these ports is estimated to be a staggering $19 billion, emphasizing the scale of the impact. Furthermore, the strike also affects the railroads that serve these ports, which can further exacerbate logistical challenges for businesses. With rail delays and limited transportation options, the movement of goods becomes even more complicated and time-consuming. To mitigate the potential impact of the strike, businesses should consider diversifying their supply chains and exploring alternative transportation routes. This may involve utilizing other ports or exploring different modes of transportation to ensure timely delivery of goods. Additionally, staying informed about the progress of negotiations and actively engaging with logistics companies that are well-prepared for the surge in container movement can help minimize disruptions. Ultimately, the ongoing strike serves as a reminder of the inherent risks associated with global trade and the importance of contingency planning for businesses operating in this industry. Adaptability and flexibility in supply chain management will be crucial for businesses to navigate through these challenging times. Article First Published at: https://www.cnbc.com/2023/07/05/canadas-port-labor-negotiations-on-hold-19-billion-in-trade-stranded.html