A flurry of logistics labor battles across Canada has put shippers in the country through the ringer.
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One scuffle at the ports looks like it is set to be resolved without any disruptions in work action, though a possible rail strike is already having some implications on apparel companies.
As rail workers at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) await the results of a federal review to determine whether they can officially go on strike , more than 700 union foremen at the country’s West Coast ports have been given a no-go to engage in a work stoppage of their own.
Just two days after the Local 514 branch of the International Longshore and Warehouse Union (ILWU) voted Friday to issue a strike notice, the Canada Industrial Relations Board (CIRB) found that the decree was in violation of Canada’s labor code.
The board said the union “failed to bargain in good faith” upon conducting the vote after finding that only one member company of the B.C. Maritime Employers Association (BCMEA) was asked to vote on the strike.
The blocked strike at the ports isn’t the only other dramatic clash for Canadian logistics workers. Nearly a month after more than 9,000 Canadian border patrol workers reached a tentative agreement with their employers to avert a possible strike, the four-year deal was officially ratified on July 4.
A similar number of rail workers represented by Canada’s version of the Teamsters voted for a second time to reauthorize a strike at the end of June, but that stoppage would be unlikely to take place until mid-July or later. All eyes in the country are on the CIRB, which is currently reviewing whether a strike would impede the country’s railroads from transporting certain essential goods.
Mike Chisholm, CEO and president of Canada-based logistics and transportation services provider A&A Customs Brokers, said that ports like Vancouver, Halifax and Montreal will likely be the biggest chokepoints of any potential rail strike.
“That’s where the rail tends to go in and out on the container side of things, so there’s going to be a big logjam there,” Chisholm said. “Then you’ll end up with ships sitting at the port for as long as this thing goes on, and then even longer, because there’s the residual effect after things get back to normal.”
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In the event of a strike, Chisholm expects the impacts to stretch to intermodal transportation via both rail and truck, with railyards getting backed up with both imports and exports, particularly since it’s cheaper to ship by rail than by truck.
“You’re also going to see a big backlog in the trucking industry, because, of course, if you can’t ship it by rail, the only other option is by truck,” Chisholm said. “There’s just no t enough capacity to handle existing volumes today. Throw all that rail volume in there and customers aren’t going to get their goods because somebody else is going to get priority. It’s just a real domino effect.”
Chisholm has been advising clients that are relying on inventory coming in the ports to stockpile the goods ahead of time, although he acknowledged that there is some inherent risk of having too much product early due to the potential cash flow challenges presented by excess inventory .
According to Chisholm, A&A Customs Brokers has had apparel clients that have brought in imports ahead of their usual cadence due to the concerns related to a potential strike this month.
But he noted that this has created a knock-on effect across Canadian shippers: “The one bit of feedback that we get when we help them is, where do we put this stuff?”
With many apparel shippers ill-equipped to store the glut of inventory, A&A has been recently helping more of these clients find warehouse and distribution space.
“At the same time, that space is filling up too, because they’re not the only ones that are trying to be proactive,” Chisholm said. “There’s really even almost a lack of capacity in the warehousing space for anybody to build up any inventory, so now they got it sitting in trucks in their yard. That’s one less piece of equipment out there that can be moving freight around. Then there’s storage costs and all those kinds of effects.”
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