UPDATE: July 13, 2023 - The ILWU and BCMEA has reached a tentative agreement which will be announced in the coming hours. This agreement was reached with the intervention of the Federal Government. Ports are expected to resume work on July 14, 2023. More news to come.
As you are likely aware, effective July 1, 2023, the International Longshore and Warehouse Union (ILWU) Canada, representing 7500 longshore workers at Vancouver Ports, went on strike. This job action impacts all ports in British Columbia, including all ports in Vancouver and Prince Rupert. The Port of Vancouver represents the largest port in Canada facilitating approximately $305 Billion in trade annually, which, for reference, is roughly equivalent to the next 5 largest Canadian Ports combined.
When the strike began the original outlook was that the job action would only last a short period of time; this assumption was made based on two major factors. First, any job action at the Port of Vancouver would have significant negative impacts on Canada’s economy; and in a time of such economic fragility, the assumption was the Federal government would react quickly to intervene in any labour disputes. Second, just before the notice to strike was provided in BC, the ILWU along the US West Coast reached an agreement with the American West Coast ports that avoided strike action. The assumption here being that the negotiations in Canada would mirror those of our neighbours to the south.
Unfortunately, this strike action, already at 11 days, has lasted longer than expected, and has a poor near term outlook as contract negotiations have broken down between ILWU and the BC Maritime Employers Association, which represents the Port Employers. The two parties met over the past weekend for the first time since July 3, but there seems to have been no positive outcomes from these negotiations, and no further negotiations have been scheduled.
There are already 16 containerized vessels offshore or at anchor in Vancouver waiting, with another 6 vessels currently inbound and destined for Vancouver. The economic impact is estimated to be around $600-750 million every day the job action continues. The downstream effects of such an economic impact will likely mean an increase in the cost of consumer goods as companies attempt to recoup the costs associated with container storage and pivoting their supply chains.
Some ocean carriers have started to explore diverting containers to alternate ports along the American West Coast, however the unions at US Ports have already indicated that they will not unload any diverted cargo from vessels. Given the uncertainty of when this labour dispute will be resolved, we recommend exploring alternate origin and destination ports in order to avoid Vancouver ports at this time.
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