Striking members of the International Longshore and Warehouse take part in a rally in Vancouver on July 9, 2023.ETHAN CAIRNS/The Canadian Press
The union representing B.C. port workers on strike is blaming the “greed” of shippers, as the labour action disrupts potash production and halts billions of dollars in international trade.
Five major shipping companies made US$103.3-billion in profit last year, compared with US$6.2-billion in 2019, before the COVID-19 pandemic, according to a report commissioned by the International Longshore & Warehouse Union Canada (ILWU).
The ILWU says the profits of the shippers contrasts with the decline of the purchasing power of its members’ wages since 2017, which has been a key point of dispute in the strike.
“The greed of shippers and terminal operators, who took advantage of an economic and health emergency to fatten their bottom lines, is the source of the problem. Yet now business groups blame workers for disrupted shipping,” said the report released Tuesday by Jim Stanford, economist and director at the Centre for Future Work.
“They took advantage of the chaos and disruption associated with the COVID pandemic to dramatically raise shipping charges.”
Drewry Shipping Consultants Ltd.’s world container index – the freight rate of a 40-foot container – peaked at US$10,377 in September, 2021. Freight rates have tumbled 86 per cent since then as global demand faltered, dropping to US$1,474 last week. Prices typically floated between US$1,200 and US$2,000 for several years prior to the pandemic.
The strike by 7,400 unionized waterfront employees started on Canada Day, hitting the Port of Vancouver, the Port of Prince Rupert in Northern B.C. and terminals on Vancouver Island.
The BC Maritime Employers Association, which represents 49 private-sector companies such as shipowners and terminal operators, warns that the economic impact is escalating as the work stoppage enters its 12th day on Wednesday. Employers estimate that more than $8.5-billion of cargo had been affected as of Tuesday.
“ILWU Canada leadership have even banded together with U.S. West Coast port workers who say they will refuse to work containerships that were rerouted from Port of Vancouver to Port of Seattle,” the BCMEA said in a statement.
Business groups and an array of politicians, including premiers, have been urging the federal Liberal government to recall Parliament to introduce back-to-work legislation.
But the ILWU, which has listed cost-of-living wage increases, alongside automation and contracting out as its main concerns at the bargaining table, has criticized such calls.
“It’s sheer hypocrisy to now argue that government should force longshore workers back to work,” ILWU president Rob Ashton said in a statement late Monday.
B.C. port strike affecting up to $775-million a day in trade, employers estimate
Labour Minister Seamus O’Regan said the focus must be on reaching a settlement at the bargaining table rather than back-to-work legislation.
“We need to get goods moving. But we must take a measured approach that is in the interest of all Canadians, rather than using blunt instruments,” Mr. O’Regan said in a statement Tuesday. “We need to protect the collective bargaining process as a fundamental pillar of our democracy.”
A survey released Tuesday by the Canadian Federation of Independent Business shows that three-quarters of respondents are calling on Ottawa to make resolving the strike a top priority. As well, the survey indicates that 53 per cent of business owners say the labour dispute will affect them.
RBC Capital Markets said in a research note that as a result of the B.C. port strike, 16 container vessels were awaiting a berth on Tuesday in the Vancouver region and Prince Rupert, with 48 more ships slated to arrive by the end of July.
The shipping industry deploys large vessels to carry containers, which are reusable steel boxes measured as 20-foot equivalent units, or TEUs. The cargo shipped in the containers includes imported goods from Asia and exports of Canadian raw materials such as potash.
“We estimate the current backlog to be approximately 63,000 TEUs, ballooning to 245,000 by July 31,” said the note issued by Michael Tran, RBC’s commodity and digital intelligence strategist. “If there’s a time to reach a deal and wrap up the strike, it’s before this Friday.”
Fertilizer company Nutrien Ltd. NTR-T said Tuesday that it halted production at its Cory potash mine in Saskatchewan because there is no more storage space at the Neptune bulk terminal, located at the Port of Vancouver.
The Cory mine, one of six operated by Nutrien, will switch to maintenance projects that were scheduled for later in the year, said Richard Reavey, director of communications for the company’s nitrogen, potash and phosphates business units.
There are currently no plans to shut down production at Nutrien’s largest mine, Rocanville, but the likelihood increases as the strike continues, Mr. Reavey said.
This country exports 95 per cent of the potash it produces, according to Fertilizer Canada. Most of the exports go through the Port of Vancouver. Few other options exist since a structural failure with a conveyer system knocked out the only other major facility on the West Coast, in Oregon.
“We urge the parties in this dispute to come to a swift resolution to prevent further damage to the Canadian economy,” Nutrien chief executive officer Ken Seitz said in a statement Tuesday.
Backed by federal mediators during negotiations, the two sides have engaged in bargaining sessions that have gone through phases of being on again and off again.
Ships at anchor remain a common sight at the Port of Vancouver, with vessels unable to quickly find a berth time slot.
Bulk grain shipments have continued being exported overseas, in accordance with the Canada Labour Code.
Two coal-export terminals, one near the Vancouver suburb of Delta and the other near Prince Rupert, have kept operating because those employers have their own collective agreements.