B.C. port workers vote on deal as businesses calculate losses

Fleets and business organizations alike continue to calculate the economic fallout of a July strike at B.C. ports, as longshore workers vote for a new collective agreement on Aug. 3 and 4.

The tentative deal has been supported by the International Longshore and Warehouse Union (ILWU) Canada and the B.C. Maritime Employers Association.

“We look forward to rebuilding our reputation as a stable gateway to and from Canada and hopefully earn the trust back that has been eroding since this job action took place,” said Kimberly Transport general manager and Port Transportation Association spokesman Tom Johnson.

A previously mediated deal was rejected at the end of July, after strike action that ran July 1 to 13. Labour Minister Seamus O’Regan called on the Canada Industrial Relations Board to intervene.

Johnson believes the government should have stepped in sooner.

“When this all shakes out, we’ll see who’s left in the industry,” he said, referring to drayage fleets and owner-operators in the area. “It’s only a matter of time before some trucking companies either pull the pin or they’re forced to go under.”

‘It wasn’t a boom’

On top of the “almost empty” warehouses, expensive land leases, and rising costs for truck parts and fuel — as well as other costs associated with the port’s truck age policy – many businesses have had to park trucks and lay off drivers, he said, noting there wasn’t a big influx of work when the strike itself came to an end.

“It wasn’t a boom that everybody was expecting. I think that we have so much capacity here right now, servicing the ports, that everybody just jumped in their truck and pretty much ate up all that work and caught up within a matter of days.”

Johnson adds there are other concerns about shippers redirecting cargo through other Canadian and American ports due to a lack of confidence in Vancouver. This could further reduce the volume of intermodal containers to be hauled.

For this reason, he hopes the deal will be ratified, and believes further concessions have been made. Standing on a picket line is not helping workers either, Johnson adds.

“I think it’s gone on long enough. I think the port workers are in the same position as everybody else, and [they] face increasing costs and so forth.”

Murray Mullen, chairman and senior executive officer at Mullen Group, said in a quarterly call with analysts that he also hopes the conflict will be resolved. But he said the worst outcome would be for port workers to return to work with a lack of motivation and productivity if they are unhappy with the deal.

Significant losses

Losses have already been significant. The Greater Vancouver Board of Trade said in a statement that $10.7 billion in traded goods were affected in the 13 days of labor disruption.

“That will undoubtedly raise the prices of goods for Canadians and businesses relying on goods flowing through our ports, said Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, in a statement.

“Pulp mills have been shut down, mines curtailed, and thousands of companies, big and small, have been left with higher bills for their goods. The next steps are unclear but if strike action recommences, the economic damage will only increase.”

Canadian Manufacturers and Exporters (CME) surveyed its members between July 11 and 13 to estimate the effects of the strike, and two-thirds felt the effect immediately, divisional vice-president Andrew Wynn-Williams told Trucknews.com. The rest indicated it was only a matter of time until their operation would be impacted.

“Just under 70% of those [two-thirds] said it was significant to severe. And ‘significant to severe’ [means] the average estimated cost for one of those manufacturers feeling an immediate impact was over $200,000 a day,” he said.

It will take approximately seven days for every day of the strike to recover from the impacts of this dispute, and the recovery might not happen earlier than this fall, he said.

Worried about the outcome

Wynn-Williams said he is worried about the outcome of the ratification vote. Tentative deals have already been rejected, and there is no certainty in the outcome. But he also believes the government needed to step in earlier to address the issue and prevent the damages from growing to the current extent.

“It’s a critical part of our transportation infrastructure. And we [CME] think that the federal government needs to plan on other similar issues and have more tools in place that they can address these things [with] before they come to a strike.”

A labor agreement at the Port of Montreal, for example, comes to an end in December, and he believes the government should get those parties to the table now to start negotiating that agreement, rather than waiting until the last minute and having it go to a strike and causing further reputational damage for Canada overseas.

“The next time they [manufacturers] go to bid on a contract with somebody, they’ll be asked the question, ‘How can you guarantee you’re going to get this to me?’”

The previous deal

According to the B.C. Maritime Employers Association (BCMEA), a previously negotiated deal included a 19.2% wage increase and an 18.5% increase to a “modernization and mechanization” retirement lump sum payment.

These changes would have resulted in a $26,000 increase in the median union longshore compensation (up to $162,000 annually) excluding pension and benefits. The retirement payout in 2026 would have increased up to $96,250 for eligible employees, in addition to employees’ pension entitlements.

A signing bonus of $41.48 per hour worked (approximately $3,000 per full-time worker) was also offered along with measures to train, recruit, and retain ILWU trades workers.

“Specifically, the BCMEA agreed to provide benefit coverage for all casual trades workers, a new tool allowance, and a commitment to increase apprentices by a minimum of 15%,” it said.

ILWU has said the strike involved fights against contracting and port automation, as well as better wages to offset inflation.