In Canada, around 7,500 unionized dockworkers commenced a strike on July 1, disrupting operations at more than 30 West Coast ports, including the ports of Vancouver and Prince Rupert. After a brief period of elevated congestion at the Port of Vancouver, waiting times began to gradually decrease, signalling a move by carriers to divert cargo to nearby U.S. ports such as Seattle and Oakland. However, dockworkers at U.S. ports refused to process diverted vessels in solidarity with the Canadian strike, leaving stranded roughly 25 inbound vessels, some of which decided to return to anchor at ports in Canada.
After 13 days of strike action, dockworkers on Canada’s West Coast reached a tentative four-year wage deal which ended the dispute on July 13. The end of the strike came only two days after Canada’s Minister of Labour ordered the intervention of a federal mediator in the negotiations. However, the agreement was later rejected by the union in the evening of July 18, which promptly resumed strike action at West Coast ports.
At the time of reporting, 14 container ships remained at anchor at the Port of Vancouver. Due to reliable rail connections, Canada’s West Coast ports are a gateway to the U.S. Midwest market for chemicals, oil and gas, lumber, and non-metallic minerals industries. Roughly 15% of import volume through Vancouver and around 65% through Prince Rupert are bound for U.S. destinations.
Authorities estimate that U.S. cargo arrivals are experiencing delays of up to two months due to the impacts to the loading and transfer of containers to railways. With the resumption of the strike action and anticipated increases in congestion, those delays are likely to gradually rise.
Food products most affected
Grains and food products have seen the most significant cumulative impact year-over-year. Much of the cargo that remains unprocessed on the water at Canadian West Coast ports are connected to the food industry. Essential food additives like dextrose, guar gum, sorbates, and citric acid have been reported on vessels at anchor, in addition to sodium sulphite and metabisulfite used in water purification processes. Dry caustic soda, commonly used in cleaning food equipment, has also been impacted.
As disruptions in the Panama Canal due to drought continue, diversions to other U.S. ports on the Gulf and East Coasts are not an ideal alternative. Some food and beverage companies reliant on continuity of shipments through Canada’s West Coast ports have reported anticipated disruptions to supply chains through October. This timeline was estimated when a tentative agreement had been reached, considering only the time it will take to work through cargo backlogs. It is now likely that disruptions to the food and beverage sector will be seen through the end of the year.
Congestion trends
Following the recent tentative agreement by the ILWU and the PMA, West Coast ports have seen average combined waiting times rise slightly, however, numbers are still below congestion metrics for the first quarter of the year. Average combined vessel counts have increased significantly in the past two weeks driven by high numbers at the Port of Los Angeles-Long Beach. Congestion metrics have improved for Gulf Coast ports, with combined average wait times falling in recent weeks. East Coast ports are trending downwards following a recent spike in waiting times.
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