Relief in B.C.’s business community over what appeared to be a mediated settlement of the crippling port workers’ strike in the province could be short-lived.
The International Longshore and Warehouse Union Canada's (ILWU) internal caucus has rejected the federal mediator’s recommended terms of settlement to end the strike that began on July 1 and has thus far disrupted an estimated $9.9 billion in cargo.
In a statement released today [July 18], ILWU president Rob Ashton said the caucus “does not believe the recommendations had the ability to protect our jobs now or into the future. With the record profits that the [BC Maritime Employers Association] BCMEA's member companies have earned over the last few years the employers have not addressed the cost-of-living issues that our workers have faced over the last couple of years as all workers have.
“The term of the collective agreement that was given with today's uncertain times is far too long. We must be able to readdress the uncertainty in the world's financial markets for our members.”
ILWU members, he said, will therefore be back on the picket lines today.
In its response, the BCMEA stated that the union’s rejection of the tentative four-year deal, even before its membership has had a chance to vote on it, again puts the “livelihoods and the Canadian economy at risk.”
It noted that both it and the ILWU had recommended ratification of the deal that had been proposed by the senior federal mediator.
The BCMEA said the proposed package included “considerable hikes in wages and benefits over and above the 10 per cent increase received over the past three years, and generally above the established norm of recent private and public sector union settlements in British Columbia and Canada.”
It added that the tentative deal also included provisions that addressed the union’s concerns over the contentious issue of contracting out work that employers have used to address labour and skills shortages.
The union has been seeking wage increases of 11 per cent in the first year of a new contract and six per cent in the second year. It has been without a contract since the ILWU’s previous five-year deal expired at the end of March.
ILWU Canada’s counterpart in the United States recently reached a tentative agreement on a six-year deal with the Pacific Maritime Association (PMA) that provides for a 32 per cent wage increase over the term of the contract for the 22,000 unionized dockworkers employed at 29 ports along the U.S. West Coast.
In its July 3 statement expressing frustration over ILWU Canada’s negotiating stance, the BCMEA pointed out that the median annual ILWU Canada salary in 2022 was $136,000, plus benefits and pension. The maritime employers group added that B.C. longshore wages have increased 40 per cent over the past 13 years and 10 per cent since the pandemic began.
In a statement released following word of the union leadership’s rejection of the tentative deal, Greater Vancouver Board of Trade President and CEO, Bridgitte Anderson, summed up the frustration of business groups in the province.
“We are dismayed and disappointed that the mediated deal was rejected by the ILWU and job action is recommencing at Canada’s West Coast ports. In the first 13 days of job action, $9.9 billion in traded goods were affected, causing significant economic harm. We are greatly concerned about the impacts the continuation of the strike will have on Canada’s international reputation as a reliable trade partner. In less than two weeks, business across Canada were facing shortages, temporary layoffs, and, in some cases, total shutdowns. The continuation of the strike will put these businesses at risk again.”
Added Fiona Famulak, the BC Chamber of Commerce’s president and CEO: “On behalf of the 100 chambers of commerce and boards of trade and the 36,000 businesses that we represent, we are profoundly disappointed the ILWU has rejected the tentative agreement.
“The strike had already dragged on too long when the tentative deal was announced last week.… The federal government needs to use every resource at its disposal to bring the parties together and bring a swift end to the strike.”
Meanwhile, the Canadian Federation of Independent Business (CFIB) renewed its call for the federal government to pass back-to-work legislation to end the strike.
In a statement released today [July 19], Corinne Pohlmann, CFIB’s executive vice-president, said the 13-day strike has already seriously damaged small businesses across the country and undermined the country’s international reputation as a trading partner.
“To let [the strike] carry on any further is negligent and will amplify disruptions of the supply chain,” Pohlmann said.
The Shipping Federation of Canada (SFC) has echoed the CFIB’s concerns about the damage the ILWU’s actions have done to the recovery of the country’s supply chain efficiency and reliability.
In a July 19 letter to Prime Minister Justin Trudeau, Chris Hall, the federation’s president and CEO, said the union leadership’s rejection of the mediated settlement “will add untold complexity and delay to what was already a complicated recovery process and cause irreparable damage to Canada’s already tenuous reputation as a reliable trading partner.”
The federation also urged the prime minister to introduce back-to-work legislation to end the uncertainty surrounding Canada’s ability to be a reliable entry point for transpacific cargo. .
That ability in the wider world has already been seriously eroded.
As the SFC pointed out: “The repercussions [of the strike] will extend well into the future, as carriers will not only be seeking alternative (and necessarily more expensive) routings for the duration of the strike and recovery period, but also reconsidering their commitment to calling Canadian West Coast ports in the longer term, given the efficiency and reliability challenges that have plagued this gateway in recent years, and the reputational damage that it continues to incur.”
The union’s rejection of the federal mediator’s recommended terms of settlement comes at a time when global trade in container cargo is dropping as the global economy slows.
According to the most recent survey numbers from Germany-based Container xChange, 65 per cent of freight forwarders confirm that 2023’s second quarter was “a slowdown for their business” compared with the same quarter in 2022.
The report from the logistics technology company also noted that container prices in June reached their lowest point compared with the same time in 2022 and 2021 in major supply chain markets, including China, North America and Europe.
U.S.-based container shipping analysts John McCown notes in his latest report that inbound cargo to the 10 largest American ports dropped 18.6 per cent in June compared with the same month in 2022.
He added that the decrease for West Coast ports was 18.9 per cent compared with 18.2 per cent for their East Coast counterparts.
June is also the ninth straight month in which there was a double-digit decline in inbound cargo volume to West Coast and other North American ports.