Canada Port Strikes: Impact on North American Supply Chains and FreightAmigo's Digital Solutions

Introduction: Labor Disputes Disrupt Canadian Ports

The logistics and shipping industry is facing yet another challenge as labor disputes bring operations to a halt at some of Canada's busiest ports. This latest disruption comes just one month after the International Longshoremen's Association (ILA) shut down U.S. East Coast and Gulf Coast ports in a three-day strike. The situation in Canada is particularly concerning, affecting major ports in British Columbia and the Port of Montreal, two crucial gateways for North American trade.

As we delve into the details of these strikes, it's important to note the following key facts:

• Over 700 unionized foremen and members of the International Longshore and Warehouse Union (ILWU) Local 514 were locked out at British Columbia ports
• Nearly 1,200 dockworkers at the Port of Montreal walked off the job
• Canadian West Coast ports handle about 20% of U.S. trade
• An estimated $800 million Canadian dollars (about $576 million USD) in trade flows through Canadian West Coast ports every day

These labor disputes are adding significant uncertainty and operational challenges for businesses, particularly as we approach the busy holiday season. In this article, we'll explore the current situation, its potential impacts, and how digital logistics solutions like FreightAmigo can help businesses navigate these turbulent times.

British Columbia Port Lockout: A Closer Look

On Monday, November 4, 2024, the BC Maritime Employers Association (BCMEA) initiated a lockout of over 700 unionized foremen and other members of the International Longshore and Warehouse Union (ILWU) Local 514. This action began at 4:30 p.m. PST and was described by the BCMEA as a "defensive" measure in response to the union's 72-hour strike notice of limited job action.

The core issues at the heart of this dispute include:

• The use of automation at ports
• Benefits and wage increases
• Welfare improvements

These negotiations have been ongoing since the expiration of the previous contract on March 31, 2023. The BCMEA's final offer to the union included a 19.2% salary increase over the next four years and an average signing bonus of $21,000. However, this offer has not been accepted, and the dispute continues.

The impact of this lockout is significant, affecting operations at the Port of Vancouver and the Port of Prince Rupert, Canada's largest and third-largest ports respectively. These ports are crucial for North American trade, handling approximately 20% of U.S. trade flows.

Port of Montreal Strike: Eastern Canada Disruptions

Simultaneously, on the East Coast, labor disputes have escalated at the Port of Montreal, Canada's second-largest port. On October 31, 2024, nearly 1,200 dockworkers represented by the Port of Montreal Longshoremen's Union, CUPE Local 375, walked off the job at 11 a.m. ET.

The key issues under negotiation at the Port of Montreal include:

• Salaries
• Scheduling practices
• Work-life balance concerns

The dockworkers have been without a collective agreement since December 31, 2023. In response to the strike, the Maritime Employers Association (MEA) announced the suspension of salary guarantees for non-working longshore workers, except for those in the bulk sector and essential services.

This ongoing strike is affecting the port's two Termont-operated terminals, which account for approximately 40% of the port's container traffic. The specific terminals impacted are the Viau and Maisonneuve terminals.

Impact on North American Trade Flows

The repercussions of these labor disputes extend far beyond the immediate vicinity of the affected ports. According to data from the U.S. Department of Transportation, total freight flows between the U.S. and Canada reached a staggering $773.9 billion across all modes of transportation in 2023. This figure underscores the critical importance of smooth operations at Canadian ports for North American trade.

Here's a breakdown of the freight flows by mode of transportation:

• Trucking: 56% ($435.7 billion)
• Rail: 15% ($113.9 billion)
• Other modes (including maritime): 29% ($224.3 billion)

The current port disruptions are likely to create bottlenecks and congestion that could potentially spread to U.S. ports closest to the Canadian border if vessels are diverted. This situation is further complicated by the looming threat of another potential ILA strike in the U.S. on January 15, 2025.

Ripple Effects Across Different Modes of Transport

The impact of these port disruptions is not confined to maritime shipping. We're seeing significant effects across various modes of transport:

1. Cargo Diversions

With both West and East Coast Canadian ports facing disruptions, cargo diversion options are limited. Most cargo will not be diverted to the Canadian East Coast as Montreal terminals are also facing strike action impacting 40% of inbound volumes. We may see vessels adjusting their port of destination strings to prioritize U.S. West Coast ports first, in an attempt to wait out the BC lockout.

2. Trucking and Drayage

The trucking community on the Canadian West Coast is preparing for high levels of congestion. This is due to several factors:

• Imminent vessel bunching
• Chassis shortages
• Limited availability of terminal pickup and empty return appointments

The situation on the West Coast will largely depend on how congested the railroads become and whether importers begin to shift new bookings for transloading and trucking to the East Coast. It's worth noting that with all British Columbia ports closed, transloading is currently not a viable option due to the inability to pick up containers.

3. Rail

The rail sector has also been quick to respond to the port disruptions. CN, one of North America's largest railroad companies, has suspended all international intermodal capacity at their inland terminals. This includes CSX & NS interchange traffic from Ohio Valley for exports destined for Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. If the strike continues over a prolonged period, we are likely to see more such actions from rail operators.

Government Intervention and Ongoing Negotiations

As the strikes continued to disrupt supply chains, the Canadian government took decisive action. On November 12, 2024, Canadian Labour Minister Steven MacKinnon announced measures to end the lockouts at Canadian ports in Montreal and Vancouver. Key points of the intervention include:

• Instructing the Canada Industrial Relations Board to fully resume operations at the ports
• Moving the dispute into binding arbitration
• Anticipating operations to be restored within days

MacKinnon emphasized the importance of negotiated agreements but stressed the need to act in the interests of all Canadians when parties fail to reach an agreement. This intervention came after a breakdown in talks over the weekend, during which the union ILWU Local 514 and the B.C. Maritime Employers Association (BCMEA) provided conflicting accounts of the negotiation process.

Port Operations Resumption and Recovery

Following the government intervention, both the Port of Montreal and the Port of Vancouver began the process of resuming operations:

Port of Montreal

Operations at the Port of Montreal officially resumed at 7:00 AM ET on Saturday, November 16. Port management has indicated that it will be a weeks-long process to restore the full flow of import and export supply chains. The resumption of operations marks the end of a week-long lockout that affected approximately 1,200 workers.

Port of Vancouver

At the Port of Vancouver, operations began ramping up on Friday, November 15. Terminals and cargo sectors are resuming activities based on individual operating plans. However, port fluidity remains a work in progress as ships navigate to berths amidst high demand and limited anchorage availability.

Long-term Implications for the Shipping Industry

While the immediate crisis appears to be resolved, these events highlight several long-term challenges and trends in the shipping industry:

1. Automation and Technology

The dispute over the use of automation at ports, particularly the plans to install optical character recognition (OCR) machinery in terminals in Montreal, underscores the ongoing tension between technological advancement and job security. This issue is likely to remain a point of contention in future labor negotiations across North America.

2. Labor Relations

The strikes and subsequent government intervention highlight the delicate balance between workers' rights and the broader economic interests of the country. Future negotiations may need to find more sustainable ways to address workers' concerns while maintaining port operations.

3. Supply Chain Resilience

These disruptions serve as a reminder of the importance of building resilient supply chains. Businesses may need to diversify their shipping routes and modes of transportation to mitigate the impact of future disruptions.

4. International Trade Dynamics

The interconnectedness of North American trade flows means that disruptions in one country can have significant ripple effects across the continent. This may lead to increased cooperation between U.S. and Canadian authorities in managing port operations and labor disputes.

How FreightAmigo Can Help Navigate Port Disruptions

In these challenging times, digital logistics solutions like FreightAmigo can play a crucial role in helping businesses navigate supply chain disruptions. Here's how our Digital Platform can support freight forwarders and shippers in adapting to these industry developments:

1. Real-time Tracking and Visibility

Our platform allows clients to track shipment status anytime, anywhere. We connect with more than 1000+ reputable airlines and shipping lines, providing real-time updates on cargo movements. This visibility is crucial during port disruptions, allowing businesses to make informed decisions about their shipments.

2. Flexible Routing Options

FreightAmigo's Digital Logistics Platform offers door-to-door freight quotes for various transportation modes, including international courier, airfreight, sea freight, rail freight, and trucking solutions. This flexibility allows businesses to quickly adapt their shipping strategies in response to port disruptions, potentially rerouting cargo through alternative ports or switching to different modes of transport.

3. Customs Clearance and Documentation Support

Our platform streamlines customs clearance processes and automates shipment documents. This can be particularly helpful when dealing with rerouted shipments or navigating unfamiliar ports, ensuring compliance and minimizing delays.

4. Integrated Insurance and Finance Solutions

FreightAmigo offers integrated cargo insurance and trade finance options. During times of supply chain uncertainty, these services can provide additional security and financial flexibility for businesses.

5. 24/7 Expert Support

Our round-the-clock logistics expert support ensures that clients have access to professional advice and assistance at all times. This can be invaluable when dealing with unexpected disruptions or making quick decisions about shipment rerouting.

6. Data-Driven Insights

By leveraging artificial intelligence and big data, FreightAmigo can provide valuable insights into market trends, potential disruptions, and optimal shipping routes. This information can help businesses make proactive decisions to mitigate the impact of port strikes or other supply chain challenges.

Conclusion: Navigating Uncertainty with Digital Solutions

The recent port disruptions in Canada serve as a stark reminder of the complexities and vulnerabilities in global supply chains. While the immediate crisis has been resolved through government intervention, the underlying issues of labor relations, automation, and supply chain resilience remain significant challenges for the shipping industry.

In this environment of uncertainty, digital logistics solutions like FreightAmigo offer a path forward. By providing real-time visibility, flexible routing options, and expert support, we can help businesses adapt quickly to changing circumstances and maintain the flow of goods despite disruptions.

As the industry continues to evolve, embracing digital transformation will be key to building more resilient, efficient, and adaptable supply chains. FreightAmigo stands ready to support businesses in this journey, offering innovative Digital Logistics Solutions that can turn challenges into opportunities for growth and optimization.

We invite businesses affected by these recent disruptions, or those looking to strengthen their supply chain resilience, to explore how FreightAmigo's Digital Platform can support their logistics needs. Together, we can navigate the complexities of global trade and emerge stronger from these challenges.