The Port of Montreal could be paralyzed by a dock workers strike later this month, rattling shippers already dealing with a global shortage of freight containers and hitting a national economy still reeling from the coronavirus crisis.
Executives with Eastern Canada’s biggest port and representatives of industries such as construction say they are already starting to see significant volumes of cargo being redirected to other ports as the clock ticks down on a seven-month truce between the longshoremen and their employer that expires on March 21. The two sides were scheduled to meet with mediators on Wednesday.
“It’s five to midnight,” said Sophie Roux, vice-president of public affairs at the Montreal Port Authority. “Time is fleeing and we know there are already negative impacts from this.”
Top business leaders are growing more vocal about the looming threat. The heads of 16 business groups, including the Canadian Vehicle Manufacturers’ Association and the Canadian Produce Marketing Association, sent a letter dated March 10 to Filomena Tassi, federal Minister of Labour, and Omar Alghabra, federal Minister of Transport, urging Ottawa to “use all tools at its disposal” to help facilitate a labour agreement.
“They have to look at ways of ensuring that the parties are brought together and that a disruption is avoided,” said Canadian Chamber of Commerce president Perrin Beatty, who signed the letter. “The cost to the economy at this point when we are still being so badly affected by COVID would simply be too great.”
People’s lives potentially hang in the balance, says Medtech Canada, the national association representing the medical technology industry. It has also written to Ms. Tassi, asking that medically necessary products such as dialysis solution that come through the port can get to patients in the event of a strike. “This is not a Quebec-only issue. All dialysis centers in Canada are at risk as these supplies are distributed across Canada,” Medtech said in the letter.
The federal government has “faith in the collective bargaining process” and continues to closely monitor the situation, Lars Wessman, spokesman for Ms. Tassi, said by e-mail.
Officials with the union and the employer declined to comment, saying the two sides agreed not to do so as part of the truce. The parties continue to negotiate, union spokeswoman Lisa Djevahirdjian said.
The Canadian Union of Public Employees-led Syndicat des Débardeurs, which represents some 1,125 workers at the port, agreed on the truce with the Maritime Employers Association, which represents ship owners and operators, last summer to negotiate a new labour agreement. The détente came after an 11-day strike by the dock workers and eight days of rotating strikes in July and August.
Backlogs and delays caused by those work stoppages cost wholesalers $600-million in sales over the two-month period, the Port Authority says, citing data from Statistics Canada. In all, 21 container ships were diverted to competing ports, and merchandise in about 80,000 20-foot containers was either grounded or rerouted. It took more than three months to clear the backlog, according to port management.
While most of the ships affected last summer were diverted to Halifax and Saint John, those ports lacked sufficient rail capacity to move the unloaded containers to their destinations, usually the U.S. Midwest, said Karen Kancens of the Shipping Federation of Canada, a trade group representing owners, operators and agents of ocean-going ships. This time, shipping lines could once again have limited options for delivering rerouted or stranded cargo to their customers, raising the specter of extensive port congestion and significant delivery delays, she said.
A strike would come at a bad time for importers and exporters, who are already dealing with supply-chain disruptions caused in part by factory closings under government lockdown orders and a global shortage of shipping container capacity as demand builds for consumer goods and other products. A delay or bottleneck at any point in Canada’s transportation network would likely have overall negative effects, according to the shipping federation.
Some transport carriers whose ships are now leaving Europe for the typical 10- to 14-day trip to North America are steering away from Montreal, Ms. Roux said. “It’s a better bet for them than the risk of having containers sitting paralyzed on the dock in the event of a stoppage.”
Dozens of businesses in Quebec and Ontario that regularly use the Port of Montreal have informed the administration they are diverting their cargo to other ports on the East coast of Canada and the United States, Ms. Roux said. That includes companies that move “critical cargo” to fight COVID-19, she said.
Suppliers of construction materials and specialized contractors are among those looking for shipping alternatives, said Guillaume Houle, spokesman for the Association de la construction du Québec. Some construction companies are tapping the port of Saint John while others are bringing in materials from Western Canada by truck or rail, he said.
“It means added costs because the distance is greater, but it ensures they get what they need,” Mr. Houle said. The difficulties add to existing challenges companies are having securing shipping containers, especially for electrical and plumbing products from Asia, he said.
Montreal’s port handled just less than 35 million tonnes of goods and commodities last year. Its biggest-volume containerized cargoes include food, forest products and metallurgical products.
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