Canada’s west coast ports are major outlets for the country’s resource exports, including potash, coal, forestry products, pork and beef. A 13-day strike last year disrupted more than C$6 billion in trade at Vancouver and Port Rupert.

The British Columbia Maritime Employers Association said the proposed lockout of more than 700 foremen was preventative as the unit of the International Longshore and Warehouse Union representing them had already issued a 72-hour strike notice.

If the union withdraws the strike notice, Monday’s lockout will not go ahead, the association said in a statement.

The two sides are in protracted talks over a labour deal and have been negotiating with the help of a federal mediator. The stoppage would also affect the port of Prince Rupert.

“In anticipation of escalating and unpredictable strike action, the BCMEA has made a decision to take defensive action in the form of a coastwide lockout,” it said in a statement.

“It will not affect longshoring operations on grain vessels or cruise operations.”

The association said the lockout notice has been issued in order to “facilitate a safe and orderly wind down of operations” in anticipation of a strike.

ILWU local 514 president Frank Morena said in a statement that it had only planned “limited job action” such as refusing overtime and accepting some technological changes, Canadian Press reported.

The impasse comes after a long-simmering dispute over pay and working conditions, including concerns over automation, with each side accusing the other of bargaining in bad faith.

The Port of Montreal, where workers are represented by the Canadian Union of Public Employees, saw the start on Thursday of a strike at two terminals operated by Termont, which handle 40% of the port’s container traffic, but only 15% of its cargo.

Grain and other exports from the west coast were hit in August by a labor dispute at Canada’s two major railways, which the federal government ended by imposing binding arbitration.

The government has resisted calls to interfere in collective bargaining in other disputes, other than offering mediation.

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During this partial strike of indefinite duration, all port terminals will remain open but dockworkers will not be working overtime as part of their duties, it said.

The port authority estimates the strike to slow down or disrupt the handling of around 50 per cent of goods, including food, pharmaceutical products and raw materials for industries, transiting through the port, both imports and exports.

At present, around 10 ships expected at the port could be affected, it said.

The Maritime Employers Association and the Canadian Union of Public Employees did not immediately respond to Reuters’ requests for comment.

Negotiations between the two parties, along with federal mediators, resumed last week but they have not reached an agreement yet. Both the employer group and the union had previously noted scheduling of meetings as a key hurdle.

Unionized workers at the Port of Montreal went on a three-day strike late last month, impacting the Viau and Maisonneuve terminals, which account for about 40 per cent of the port’s container traffic.

—Reporting for Reuters by Abhinav Parmar in Bengaluru

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The strike ended sooner than investors had expected, weakening shipping stocks across Asia on Friday as freight rates were no longer expected to surge.

At least 54 container ships queued outside the ports as the strike had prevented unloading and threatened shortages of anything from bananas to auto parts. Everstream Analytics was calculated the number queuing at 4:00 p.m. ET (2000 GMT). More ships are sure to arrive. Pricing platform Xeneta said it was likely to take two to three weeks for the normal flow of goods to be reestablished.

“Remember that ships keep calling, so it’s not just a matter of handling the ships already in line, but to work extra hard to run down the congestion before supply chains are re-running,” Xeneta Chief Analyst Peter Sand told Reuters.

The International Longshoremen’s Association (ILA) workers union and United States Maritime Alliance (USMX) port operators announced the deal late on Thursday. Sources said they had agreed a wage hike of around 62 per cent over six years, raising average wages to about $63 an hour from $39 an hour.

Shares in shipping companies in Asia and Europe fell.

“Shipping stocks had previously rallied on expectations of price increases triggered by the strike by U.S. dock workers and the tense situation in the Middle East,” said Taishin Securities Investment Advisory analyst Tony Huang.

The ILA launched the strike by 45,000 port workers, their first major work stoppage since 1977, on Tuesday, affecting 36 ports from Maine to Texas. JP Morgan analysts estimated the strike would cost the U.S. economy around $5 billion per day.

Retailers account for about half of all container shipping volume, with Walmart, IKEA, and Home Depot among those that rely on the East Coast and Gulf Coast ports, according to eMarketer analyst Sky Canaves.

Bill of lading figures from Import Yeti, a data firm, show the importers reliant on the affected ports include IKEA, Walmart and Goodyear Tire & Rubber.

East Coast ports are also destinations for coffee, whose price has risen because of the disruptions.

Although the tentative deal on wages has ended the strike, the two sides will continue hammering out other issues, such as the ports’ use of automation that workers say will lead to job losses.

“The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy,” the National Retail Federation said in a statement. “The sooner they reach a (final) deal, the better for all American families.”

Cargoes stuck at US ports as labor strike continues https://reut.rs/3zSu1g3

Additional reporting for Reuters by Jihoon Lee in Seoul, Emily Chan in Taipei, Tom Westbrook in Singapore, Stine Jacobsen in Copenhagen

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“All Port of Montreal terminals are now open, and cargo can be picked up or dropped off as usual … clients waiting to import or export goods can expect delays in the coming weeks,” it said.

The partial strike hit the Viau and Maisonneuve terminals, which account for about 40 per cent of the port’s container traffic.

Talks between the employer and union remain in a deadlock over wages.

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The Teamsters Canada Rail Conference served its 72-hour strike notice on Aug. 19 to the Canadian National Railway (CN Rail) and Canadian Pacific Kansas City (CPKC). In response, CN said it will lockout workers until a new agreement or binding arbitration is reached. CPKC previously stated they would lockout the Teamsters. 

Greg Northey, vice president, corporate affairs for Pulse Canada, said both railways being shut down would be an “unprecedented” situation and called the potential impact “significant”. 

“For pulses, around 90 to 95 per cent are moved by rail,” he said. “In the event of both railways being disrupted … a huge amount of our exports will be sort of stuck. It’s particularly pressing right now because peas are the first crops off. It’s very problematic for those farmers and for those exporters who rely on rail and don’t have them available.” 

Farmers will likely choose to keep their crops in storage, according to Northey, adding that elevators are also an option but have limited storage capacity. However, a rail shutdown would see failures of contracts with buyers. 

“We’re going to see massive delays. We’re going to see massive costs. We’re going to see contract penalties,” Northey said. “There’s not much that can be done to move the volume of pulses that we need to move as a contingency. We’re really at the mercy of the two railways not functioning. There’s not much you can do to replace a railway.” 

Northey said prices in the short-term will drop in an attempt to prevent deliveries. The long-term effects will be hard to determine, but he added that competitors may move into certain markets and pulse growers will have to price accordingly. 

Pulse Canada, along with 22 other crop and agricultural industry groups across the country, joined forces on a campaign called Stop The Strike. They are asking the federal government to intervene and prevent the shutdown from happening before Aug. 22. The website also allows visitors to send a form email to federal cabinet ministers and their respective MPs. 

But even before the shutdown becomes official, the damage has already started. 

“CPKC has already stopped allowing new shipments on their rail lines as of (Aug. 20),” Northey said. “(This shutdown) is going to be way too damaging for us and the economy.” 

Adding to the untimeliness of a work stoppage is that Canadian pulse crops have done well this year. 

“It’s turning out to be a pretty good (crop). There is plenty of positivity for sure,” Northey said. “India is back in the market for peas, so there is a strong demand. What’s particularly frustrating is this is some of our best windows in terms of demand and prices, especially for peas. Some of that enthusiasm has been suppressed because of our issues with the railways.” 

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“The impact of a strike would be particularly severe on bulk commodity exporters in both Canada and the United States as trucking is not a viable option for many agricultural shippers,” the letter said, citing large volumes and vast distances.

Unless last-minute labor agreements are reached, both Canadian National Railway and Canadian Pacific Kansas City, an effective duopoly, will shut nearly all freight rail services in Canada for the first time at midnight on Thursday.

Canada is the world’s top exporter of canola, used in food and biofuel, and of potash fertilizer, as well as the No. 3 wheat exporter. While a lockout or strike would directly involve 10,000 Canadian employees of the railroads, not those in the U.S., it would have knock-on effects on the U.S. economy due to the countries’ crisscrossing rail lines.

The rail operators have said lockouts will begin on Thursday. The Teamsters union, which is demanding better wages, benefits, and crew scheduling, has issued a Thursday strike notice to CPKC.

The stoppage will halt shipments of U.S. spring wheat from Minnesota, North Dakota and South Dakota to the Pacific Northwest for export, said Max Fisher, chief economist at the National Grain and Feed Association.

CPKC ships grain from the Dakotas and Minnesota to west-coast export terminals via Canada, according to the U.S. government.

U.S. farmers still have nearly two-thirds of the spring-wheat crop to harvest, the U.S. Department of Agriculture said on Monday. Soy, corn and canola harvests are still a few weeks away in North America.

Canada’s prairie elevator network would run out of storage capacity within 10 days of a stoppage, said Mark Hemmes, head of Quorum Corp, which monitors Canadian grain handling and transportation.

Shippers are also concerned about U.S. corn products heading to Canada. In 2023, Canada was the top destination for U.S. ethanol exports, and almost three-quarters traveled by rail, according to USDA.

“We just can’t have the railroads not operating,” Fisher said.

The U.S. exported $28.2 billion of agricultural products last year to Canada, its third-largest destination for agricultural exports behind China and Mexico, USDA said.

The U.S. imported $40.1 billion of Canadian agricultural products last year, making Canada the second-largest origin of U.S. agricultural imports behind Mexico, the agency said.

About 85 per cent of the 13 million metric tons of U.S. potash imports last year came from Canada, nearly all of which crossed by rail, according to USDA.

‘No good time’

U.S. corn farmers apply fertilizers in fall and spring, but potash imports from Canada are consistent throughout the year, said Krista Swanson, chief economist for the National Corn Growers Association.

“Given constant trade flows and the importance of the trade relationship between the two nations, there is no good time for this to occur,” Swanson said.

The railways move an average of 69,000 tons of fertilizer product per day, equivalent to four to five trains, said Fertilizer Canada spokesperson Kayla FitzPatrick. Disruptions will cost the industry C$55 million ($40.34 million) to C$63 million per day in lost revenue, not including logistical and operational costs, she said.

Canadian meat producers warned that a rail stoppage would result in millions of dollars in losses and waste.

The Canadian Meat Council and Canadian Pork Council said some processing plants expect to lose up to C$3 million a week, and noted these facilities would be forced to shut down within seven to 10 days of a rail stoppage. Once the railways resume service, it would take two to five weeks for plants to return to normal capacity.

There is concern that the movement of Ontario soybeans to export markets, primarily Japan, will completely stop just before the harvest, said Crosby Devitt, CEO of Grain Farmers of Ontario.

With crop-shipment delays lasting beyond a week, companies must pay contract penalties and demurrage for ships waiting for grain to arrive, piling significant cost onto the industry, said Wade Sobkowich, executive director of the Western Grain Elevator Association.

“We’ll be playing catch-up for the rest of the harvest year, till next July,” he said.

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More than 95 per cent of workers at Canadian National and Canadian Pacific Kansas City railways have voted in favour of a strike that could happen as early as May 22.

The farm group said this could cause mass disruption to the agricultural sector and the Canadian economy.

“As farmers, our operations are closely tied to rail transport, both inbound to access crop inputs and outbound to deliver grain to export position,” said chair Andre Harpe.

“A rail strike now is the last thing we need. We’re at a critical point in the seeding season, and any delay in shipping can directly affect our bottom line and cause substantial economic losses across the agricultural sector.”

The organization said about 94 per cent of Canadian grain moves by rail. Job action would mean elevators could not accept grain, leading to delayed payments and financial hardship.

At port, demurrage and weakened trade relations could result.

In June 2023 Canada exported more than 2.6 million tonnes of grain. GGC said that illustrates the potential loss of $35 million for each day of a June strike.

“We urge the unions and railway companies to consider the broader impact of their negotiations,” Harpe said.

—Karen Briere writes for the Western Producer from Saskatchewan

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“CN cannot escape the spotlight. The shameful behaviour by CN Autoport in Halifax will be met with resistance across our union,” said Lana Payne, Unifor national president in a March 14 news release.

“CN can expect more unscheduled disruption from coast-to-coast if it continues strike-busting tactics,” Payne added.

Unifor said it “safely” stopped the train at “a rail crossing at a public roadway near CN’s Winnipeg yards” where close to 100 Unifor members and supporters were holding a demonstration.

Workers at Autoport, a CN-operated transshipping hub at the Port of Halifax, began their strike on February 27, according to a news release from Unifor. Unifor Local 100 represents 239 workers at that facility.

Unifor said it stopped the train as a protest after CN brought in replacement workers to work at the Halifax facility. It said some cars, loaded onto trains by these replacement workers, end up in Winnipeg where they’re stored before delivery elsewhere in North America.

“The strike in Halifax will be resolved with good faith bargaining at the bargaining table,” said Gavin McGarrigle, Unifor’s western regional director. “CN is wrong if it thinks it can bully our members with scabs. This approach will only extend the strike and cause headaches for its national operations.”

In a statement, CN, speaking for Autoport, did not directly address the incident, however it said that it respected the right to peaceful and safe strike actions and remained “committed to achieving a fair negotiated settlement with the union.”

“We recently reiterated to employees that we remain ready to find a resolution at the bargaining table as soon as Unifor is ready,” a CN spokesperson said.

“Our contingency plan is keeping the supply chain fluid and goods moving safely. These activities will continue uninterrupted as along as necessary.”

–Updated March 15 to add comments from CN.

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“This tentative agreement is subject to a ratification vote that will be held next week,” Rogers Sugar Inc. said in a statement today.

The workers walked off the job on Sept. 28 after, “the Company was proposing a Collective Agreement, with items that were brought up by the membership, as non-starters,” said union Public and Private Workers of Canada Local 8, which represents the workers, in a Sept. 29 news release.

The statement from Rogers contained no details as to what the tentative agreement contained.

In September, the union said it would not entertain “continuous shifting” and running the refinery 24 hours a day, seven days a week. A Sept. 25 news release said the union was also seeking increases in benefits and protection from inflation and rising costs of living among other demands.

The strike, which sparked sugar shortages for businesses like bakeries western Canadian grocery stores, led the Alberta Sugar Beet Growers to call for a national domestic sugar policy to shift focus to home-grown sugar beet production.

The group said its growers produce only eight per cent of the sugar sold in Canada, while the remainder is imported cane sugar. The goal of a domestic sugar policy, as laid out by the Alberta group and its national counterpart, the Canadian Sugar Beet Growers Association, would be to double sugar beets’ market foothold to 16 per cent of national sugar consumption. This would drive investment in refineries and open new grower opportunities.

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