Canada Port Strike Over on New Tentative Deal

More than 7,400 union dockworkers at Canadian West Coast ports officially ended a 13-day work stoppage across 30 gateways Thursday after striking a tentative four-year contract agreement with maritime employers.

The International Longshore and Warehouse Union (ILWU) Canada and the British Columbia Maritime Employers Association (BCMEA) reached the new tentative deal Thursday morning. ILWU Local 502, whose longshore workers operate out of the Port of Vancouver, confirmed the agreement on its website.

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Terms of the deal have not been disclosed. Both sides still have to ratify the agreement.

In a statement, the BCMEA, which includes 49 marine terminals and ocean carriers, said it is working closely with the union, its local branches and supply chain partners to “safely resume operations as soon as possible.”

Federal mediator Peter Simpson had proposed a new contract as North American trade groups called for the federal government to enforce back-to-work legislation.

On Tuesday, with talks appearing to make no progress, Canadian Labor Minister Seamus O’Regan gave Simpson 24 hours to submit recommended settlement terms. From there, O’Regan sent the terms to both parties.

They were given until Thursday to respond and came in 10 minutes under the 10:30 a.m PT.

At the time, O’Regan said there was a “good deal within reach,” claiming that the issues holding back an agreement between the union and the employers weren’t sufficient to justify a strike.

On Thursday, O’Regan expressed relief on Twitter.

Some of the groups that had supported federal intervention included the American Apparel & Footwear Association (AAFA), the Canadian Federation of Independent Business (CFIB) and the Canadian Manufacturers & Exporters (CME).

Nate Herman, senior vice president, policy at the AAFA, pointed out that getting government leaders involved has yielded similarly successful results in the U.S. It worked with avoiding a rail strike late last year and held both sides of the U.S. West Coast port drama reach a deal last month.

A port shutdown calculator published Wednesday by a group of Canadian trade associations said an estimated $8.9 billion in trade has been disrupted since the strike began. The Royal Bank of Canada estimated that 63,000 shipping containers were still waiting to be unloaded at the B.C. ports.

Herman noted that some ships were turning around and being sent back to Asia instead of diverted down the West Coast, particularly as U.S.-based ILWU members said they would not unload containers from the rerouted ships.

“To wait for that boat to come back to the Pacific coast, that could be another eight weeks delayed,” Herman told Sourcing Journal ahead of the deal. “When you’re talking about product for back-to-school or holiday, that could have started having a huge impact.”

‘Severe’ impact to US rail averted

The strike has upended Canadian rail traffic into the U.S., with year-over-year intermodal Canadian rail units down 46.2 percent for the week ended July 8, according to data from The Association of American Railroads (AAR).

The plunge affected delivery lead times.

It would have taken three to five days for every day the strike lasted for networks and supply chains to recover, according to an estimate from the Railway Association of Canada. With the strike lasting 13 days, that puts projections out to late August to late September.

“The reason that Vancouver and Prince Rupert, particularly the latter, are attractive is because of their rail connections,” said Herman. “Prince Rupert is completely intermodal—you just go strictly from a ship onto a train. That gives you rail access to the center of the U.S. If you go to the U.S. West Coast, the rail connections either are not there, or there are a lot less of them. And then you have to rely on trucking.”

Third-party logistics (3PL) provider ITS Logistics said it could take one-to-three months for operations to return to normal.

According to the company’s U.S. Port/Rail Ramp Freight Index, most of the freight transported inland from the West Coast ports are destined to major U.S. rail hubs including Chicago and Memphis.

In the index, ITS Logistics classified the rail ramp operations across both the Western and Eastern U.S. as “severe,” a shift from “normal” in June. The reclassification comes amid concerns that an increase in container dwell at the Western Canada ports could overwhelm rail lines and ramps when goods start to transfer from the ocean terminals. At the same time, this causes continued concern for ocean chassis availability at inland U.S. rail ramps.

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