A strike crippling Canada’s largest port is taking a mounting toll on businesses, from surging costs and pending layoffs to warnings that the greatest hit will be to the country’s reputation.
With imports and exports at Port Metro Vancouver at a crawl, some companies have notified workers of layoffs as the labour dispute with truckers enters its 22nd day. Other companies have found alternate export routes, though at a steep price.
Businesses also fear customers will abandon them amid this, the third labour disruption by truckers in 15 years. Another hit to the country’s reputation would come just after Canada signed a free-trade agreement with South Korea, and has designs on becoming a major oil exporter to Asia.
Business leaders say their customers are already nervous.
“The big added cost that I can’t put a dollar [amount] on is the reputation – that feeling of dependability,” said Kari Yuers, chief executive officer of Kryton International Inc. “That plagues you for years to come.”
Kryton waterproofs concrete, and has worked on projects around the world, such as Singapore’s Marina Bay Sands, Asia’s largest casino complex. Ms. Yuers said the protracted strike puts her company at risk of losing out on similar contracts.
“Every time a big job or big project comes up, and there’s that question on ‘can we trust this Canadian company to be that premiere supplier?’… Stuff like this is brought up.”
Kryton, a family-owned group with an employee profit-sharing program, is paying 225 per cent more to ship cargo overseas as it moves goods through Montreal’s port, Ms. Yuers said. That equates to about $3,000 per container. The Vancouver-based company does 80 per cent of its business overseas.
At the same time, importers face hefty fees to keep their cargo waiting at the port. James Lepp is paying $480 a day to keep a container “hostage” at the port during the strike, a significant cost for the golf accessory store owner in Abbotsford, B.C. With two more shipments inbound, the bill could rise.
The port has some of the highest storage fees on the West Coast, 10 times higher than those at the Port of Los Angeles. Truckers also disrupted activity at the port in 1999 and 2005.
A range of companies from major retailers to manufacturers face inventory shortages, layoffs and shutdowns, said Bob Ballantyne of the Freight Management Association, which represents more than 100 companies. And for exporters, the stoppage that dragged on for three weeks means lost sales that might never be replaced, he said.
“It’s definitely affecting our members,” Mr. Ballantyne said in an interview from Ottawa.
The stoppage, for example, has halted the export of 4,000 tonnes a week of malted barley destined for brewers around the world. Big buyers whose contacts are going unfilled include Japan and South Korea, said Phil de Kemp, president of the Malting Industry Association of Canada.
Mr. de Kemp also said the shutdown is damaging Canada’s economic security and reputation as a reliable shipper and risks losing customers to international rivals. On the flip side, incoming alcohol is also problem. Thousands of cases of wines, spirits and beers from around the world are sitting in the steel containers. Supplies held during Saint Patrick’s Day, but liquor store owners have warned of looming shortages, and the alcohol could spoil in the sun.
Aspen Planers Ltd., a lumber company in Merritt, B.C., expects to lay off between 30 and 60 employees in about a week and more could be given pink slips following that, said president Surinder Ghog. Aspen ships about $5-million of lumber to Asia a month, and shuttering a plant costs six figures per day, he said.
Canadian National Railway obtained an injunction preventing obstruction of the company’s domestic intermodal terminal that ensures traffic moves in and out of the port, said company spokesman Mark Hallman.
But the strike is affecting CN’s container filling operations, in which grain, lumber and pulp are readied for trucking to ships.
Mr. Hallman noted some ship operators are rerouting to such ports as Seattle and Tacoma, Wash., as the terminal runs out of room.
“If the strike does not end soon, it could cause more inbound ocean vessels carrying containers, including those for rail transport into the continent’s interior, to divert away from Vancouver in a serious way, a concern for CN,” Mr. Hallman said.