Container port operations across Canada have been halted due to labor strikes, leaving U.S. trade in a state of uncertainty.

• The ports of Vancouver and Prince Rupert have come to a halt after ILWU Local 514 went on strike.
• A strike at the Port of Montreal has led to a labor action.
• The delivery of U.S.-bound goods was affected for months due to 13-day strikes at two West Coast ports in July 2023, impacting the shipment of apparel, auto parts, and key industrial chemicals.

On Monday, a labor strike halted operations at key ports on Canada's West Coast, including the largest container port in Vancouver and the Port of Prince Rupert.

On Monday morning, the International Longshore and Warehouse Union Ship & Dock Foreman Local 514 began striking, immediately halting the flow of containers and cargo through West Coast ports, which handle $800 million in daily trade.

Nearly 20% of U.S. trade enters Canadian ports Vancouver and Prince Rupert, where strikes occurred after union leaders and industry representatives were unable to reach a deal before the cooling-off period ended. The ILWU Local 514 contract expired on March 31, 2023, with 96% of union members voting in favor of a strike in September.

A recent strike has affected the Port of Montreal, which is Canada's second-largest port, and now a strike has been announced by CUPE Local 375 at Prince Rupert, Canada's third-largest port. Montreal processes 40% of all East Coast container traffic, and two terminals have been blocked since Thursday.

Canada's largest trading partner is the United States, with containers carrying footwear, apparel, auto parts, chemicals, and lumber being some of the top products that enter the Port of Vancouver and utilize Canadian transportation to reach the U.S.

The U.S. Department of Transportation reports that rail cross-border trade between Canada and the U.S. accounted for 14% of the total bilateral trade of $382.4 billion in the first half of the year. Additionally, U.S. Census data indicates that approximately $572 million in container trade arrives daily in the U.S. from Canada.

The closure of ports in Vancouver and Prince Rupert is predicted to have a substantial impact on chemical importers, particularly on companies that rely on the rail networks of these ports to transport goods to the Midwest, according to Eric Byer, CEO of the Alliance for Chemical Distribution. Specific chemicals that are transported through Vancouver include caustic soda, ethylene glycol, and sodium chlorate. These chemicals are used in a variety of important applications, including water treatment processes, plastics, solvents, paper, pesticides, cleaning products, and de-icing products.

The International Longshore and Warehouse Union of Canada staged a 13-day strike in July 2023, causing logistics executives to worry about the potential impact on their operations. The strike resulted in delays for the movement of U.S. bound-freight, with rail containers taking anywhere from 39 to 66 days to return to normal.

"According to Paul Brashier, vice president of global supply chain for ITS logistics, Vancouver processes a substantial amount of ocean containers that move via rail to the U.S. He emphasized that a prompt resolution to the ongoing dispute is crucial as it will have a detrimental impact on many supply chains that require goods for manufacturing and the holiday peak retail season for replenishment."

The Port of Vancouver recorded a 14% increase in container growth in the first half of 2024, with 1.8 million TEUs processed. Loaded container imports surged by 19%, reaching 930,300 TEUs, while loaded container exports grew by 4% to 412,100 TEUs. The port processes an estimated $840 million in export and import cargo daily.

Retailers have increased their imports in anticipation of potential labor disputes, including the recent U.S. East Coast strike, which led to trade diversions and ongoing changes in trade routes due to the Red Sea attacks and avoidance of those waters by global shippers.

The closure of the Canadian West Coast trade gateway could force carriers to unload import cargo on the already congested U.S. West Coast, increasing dwell times and lengthening overall transits. The Port of Vancouver offers Midwest importers a chance to diversify their Asia-to-U.S. supply chain.

The U.S. West Coast ports were diverted with vessels during the last strike, but currently, the ports in Los Angeles and Long Beach, California, are experiencing longer rail-bound container wait times due to the recent East Coast strike diversions and a lithium ion battery fire on September 26 caused by an overturned tractor trailer which burned for days, temporarily closing the ports.

"The American Apparel and Footwear Association CEO, Steve Lamar, expressed concern in an email statement about the overstressed logistics networks due to Houthi attacks and the threat of an East Coast strike. The lockout of over 700 employees at the British Columbia ports, combined with a strike at two terminals in the port of Montreal and two-year high rail dwell times on the U.S. West Coast, will cause a significant disruption to North American supply chains as we approach the holiday shopping season."

The BC Maritime Employers Association announced a lockout of striking workers as a defensive measure after receiving a 72-hour strike notice from ILWU Local 514. The lockout began with the 4:30 p.m. shift on Monday and will continue until further notice, with exceptions for grain and cruise operations.

The negotiations between the two parties, led by the Federal Mediation and Conciliation Services (FMCS), have stalled due to automation being a significant obstacle to reaching a deal. DP World Canada proposed implementing remotely controlled rail-mounted cranes at its Vancouver terminal. In a statement, Frank Morena, President of ILWU Local 514, stated that DP World Canada had previously reached a "manning agreement" with ILWU Local 500 regarding these cranes, but refused to do so directly with Local 514.

The ongoing negotiations between U.S. East Coast ports and ports management are centered on automation, with a mid-January deadline to reach a deal or face another strike.

The BCMEA's final offer before the strike included a 19.2% wage increase, a lump sum payment of approximately $21,000 (CAD) per eligible foreperson, which combined a signing bonus and retroactive pay to April 2023, with all retroactive pay and bonuses to be paid by mid-December. Additionally, there was a 15% increase to retirement benefits and a 47% increase to meal allowance.

On November 2, Canadian Labor Minister Steven MacKinnon stated that he had spoken with the BCMEA and ILWU 514 about the negotiations for their new collective agreement. Federal mediators are currently on site, ready to assist the parties. It is the responsibility of the parties to reach an agreement. The success of businesses, workers, and farmers depends on it.