B.C. ports are frozen amid a labour dispute. What does this mean for

A major trade artery was shut down on Monday when employers locked out more than 700 foremen at ports across British Columbia, sparking fears across the country for Canada’s supply chain. 

With a partial closure already affecting two terminals at the Port of Montreal due to a separate labour dispute, this new stoppage could see more shipping backlogs for businesses as the window closes on importing goods for the holiday season.

The B.C. Maritime Employers Association (BCMEA) said they’d made the “difficult decision” to lock out workers Monday afternoon, after the International Longshore and Warehouse Union (ILWU) Local 514 issued a 72-hour strike notice for limited job action, which was set to begin at 8 a.m. PT on Monday. The lockout doesn’t apply to grain or cruise operations. 

The union said its limited action consisted of an overtime ban and a refusal to implement tech changes on Monday if an agreement wasn’t reached. It previously accused BCMEA of “acting recklessly” by threatening the lockout. 

Canada’s West Coast is its main trade portal for shipping goods by sea. 

“Our West Coast ports handle $800 million worth of cargo every single day,” Pascal Chan, senior director of transportation, infrastructure and construction at the Canadian Chamber of Commerce, told CBC News. “That accounts for something like 25 per cent of the goods flowing through the country.”

What happens next

When the functioning of a major port is impacted, some ships that were supposed to bring goods to that port can end up anchored outside it, waiting for the strike to end. This is often the case for ships containing perishable food products, according to Fraser Johnson, a professor of operations management at the Ivey Business School with Western University in London, Ont. 

But most ships are rerouted to other ports — which in this case means more goods intended for Canada being rerouted to U.S. ports on the West Coast, upping the end cost for Canadian businesses.

Freight rates have already increased threefold over the last year due to a number of factors, including problems in the Suez Canal and a drought in the Panama Canal increasing transit times for ships, Johnson said. 

The B.C. ports being closed down “affects virtually everything,” he said, ranging from food and retail goods for the holiday season to commodities we export, like lumber, coal or automobiles. 

“The general rule of thumb is that for every day that the port is shut down, it takes a week to be able to recover,” he said.

In Montreal, two terminals are also currently closed after longshore workers went on strike last week, paralyzing 40 per cent of total container capacity at…