A major trade artery was closed Monday when employers locked out more than 700 supervisors at British Columbia ports, sparking fears across the country for Canada’s supply chain.

With a partial shutdown already affecting two terminals at the Port of Montreal due to a separate labor dispute, this new shutdown could lead to more shipping delays for businesses as the window for importing goods closes for the period parties.

The BC Maritime Employers Association (BCMEA) said it has taken difficult decision Workers were locked out Monday afternoon after International Longshore and Warehouse Union (ILWU) Local 514 issued a 72-hour notice of a limited industrial action strike, which was scheduled to begin Monday at 8 a.m. Pacific Time. The lockout does not apply to grain operations or cruises.

The union said its limited action consisted of a ban on overtime and a refusal to implement technological changes on Monday if a deal was not reached. He previously accused the BCMEA of act recklessly by threatening a lockout.

The West Coast of Canada is its main commercial gateway for the maritime transport of goods.

What happens next

When the operation of a major port is impacted, some ships that were supposed to transport goods to that port may find themselves anchored outside, waiting for the strike to end. This is often the case for ships containing perishable food products, according to Fraser Johnson, a professor of operations management at the Ivey Business School at Western University in London, Ont.

But most ships are being redirected to other ports, which in this case means more goods destined for Canada are being redirected to U.S. ports on the West Coast, driving up the final cost. for Canadian businesses.

Freight rates have already tripled over the last year due to a number of factors, including problems in the Suez Canal and a drought in the Panama Canal, increasing ship transit times, a Johnson said.

British Columbia ports closed affects practically everything, ” he said, ranging from food and retail products for the holiday season to products we export, such as wood, coal or automobiles.

The general rule is that for every day the port is closed, it takes a week to recover, he said.

In Montreal, two terminals are also currently closed after last week’s longshoremen’s strike, crippling 40 percent of the total container capacity at Canada’s second-largest port. In an update last Thursday, the Montreal Port Authority said some ships already en route to Montreal had turned back to other ports, and several others were expected to follow suit.

The union’s main demand in British Columbia concerns the protection of job security in the context of increasing automation at ports. In Montreal, work-life balance is one of the main issues for strikers.

How consumers are impacted

The average Canadian won’t see shortages in their grocery stores or retail stores in the short term, Johnson said. But if the labor dispute continues for several weeks, these impacts could ripple out as shipping costs pile up.

It may not be the first day, but… when you start seeing millions and millions of dollars of business loss every day, absolutely, Canadians are going to feel that, Chan said.

Johnson said small and medium-sized businesses will likely feel the impact first. Smaller operations don’t have the flexibility of larger ones in terms of contracts, leading to increased costs and delays when shipping plans change.

When goods do not pass through ports, this includes exports. The 13-day strike at British Columbia ports last year saw British Columbia’s exports fall 23 percent in July 2023, hitting their lowest point since the pandemic, Chan said.

Fertilizer Canada, which represents Canadian fertilizer producers and distributors, warned in a statement Friday that a closure of British Columbia’s ports would cost their industry $9.7 million. (new window) per day in loss of turnover from potash fertilizer sales. Canada is the world’s largest producer.

WATCH | A labor professor believes that the lockout is the employers’ strategy to lobby for federal intervention:

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Foremen set to be locked out over contract dispute at B.C. ports

Hundreds of foremen in Vancouver and Port Rupert were locked out by their employer, the BC Maritime Employers’ Association, Monday afternoon, with the employer calling it “a defensive action after port workers filed a 72-hour strike notice. The union says the BCMEA is overreacting.

Labor Minister Steven MacKinnon said in an article Saturday on X (new window) that federal mediators are on site, ready to assist the parties, but that it is the responsibility employers and the union to reach an agreement.

Businesses, workers and farmers are counting on them to reach an agreement. he said.

The labor disputes at Canadian ports are just the latest in a series of supply chain disruptions, including a four-day strike at grain terminals in September and the temporary closure of the country’s two largest railways. Canada this summer due to a railway strike.

Experts fear these disruptions could damage our reputation in international trade.

Other global partners view Canada as a reliable partner for doing business, said Hossein Piri, assistant professor at the Haskayne School of Business at the University of Calgary.

As such, ongoing threats to Canada’s supply chain can tarnish our reputation globally, and it is not easy to repair.

Alexandra Mae Jones (new window) · News from Radio-Canada