A Canadian Pacific Railway locomotive pulls a train in the Port of Vancouver, British Columbia, Canada, Thursday, August 22, 2024.
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Canadian Labor Minister Steven MacKinnon invoked federal powers to end work stoppages at the ports of Vancouver, Prince Rupert and Montreal, ordering final and binding arbitration between unions and port ownership.
Union strike action and port ownership lockouts have hit both coasts of the U.S.’s major northern trading partners. Vancouver and Prince Rupert have been blocked Montreal longshoremen were turned away by port authorities on Monday since Nov. 4.
But the damage to the supply chain has been done, and it will take weeks to clear the congestion on containers shipping to Canadian and U.S. companies.
“These disputes are causing significant disruption to the retail supply chain and occur during one of our busiest times of the year,” the Retail Council of Canada said in a statement to CNBC. “The ripple effects will continue to be felt. Our industry will need weeks to It will take time to recover, but Canadians can rest assured that they will continue to have access to all essential retail goods in the coming days.”
Trade with the United States will require recovery weeks as well as. About 20% of U.S. trade arrives at the Canadian ports of Vancouver and Prince Rupert, where strikes broke out after union leadership and industry representatives failed to reach an agreement before a cooling-off period expired. The ILWU Local 514 contract expires on March 31, 2023, and 96% of union members voted in favor of a strike in September.
According to statistics from the U.S. Department of Transportation, cross-border rail trade between Canada and the United States accounted for 14% of the total bilateral trade of $382.4 billion in the first half of the year. Approximately $572 million in container trade arrives in the United States from Canada every day. According to U.S. Census data.
Stephen Lamar, CEO of the American Apparel & Footwear Association, told CNBC that the association is relieved that Canada’s three busiest ports will resume operations and hopes to negotiate a long-term, mutually beneficial agreement. “The blockade of Canadian ports is causing ship diversions and causing congestion and delays across North America. Canada faces reduced rail capacity due to mandatory winter train length safety restrictions, while the U.S. West Coast is also facing Two years of high-speed rail stayfurther disruptions will put extreme stress on the transportation network,” Lamar said.
MacKinnon told a news conference that negotiations had reached a “complete deadlock” and that the step was needed to avoid any economic and reputational damage to Canada.
“If the shutdown continues, the impact will only be more severe and our strong reputation for reliability will be at risk due to these logjams, with more than $1.3 billion in merchandise value being affected every day,” McKinnon said.
This is the second time in recent months that McKinnon has stepped in to stop a strike. Under Section 107 of the Canada Labor Code, the Minister of Labor can order binding arbitration to end a labor dispute. In August, he ended his lockout Canadian Pacific Kansas City and Canadian National Railway Corporation Refer negotiations to the Canadian Industrial Relations Commission.
The existing collective agreement will remain in force until the dockworkers union reaches a new agreement with the port.
