North American Port Strike Possibility Worries Supply Chain

The threat of port strikes throughout North America continues to cause concern within already strained supply chains.

Over the weekend, Canada's Industrial Relations Board (CIRB) ruled that a planned 72-hour strike against DP World in Canada was in violation of the country's labor code, narrowly avoiding a three-day shutdown this week.

The ILWU Ship & Dock Foremen Local 514 had issued a formal notice to its employer on Friday, with the strike action set to commence on Monday. This led to a weekend filled with intense negotiations and discussions to prevent the strike.

ILWU 514, representing nearly 600 workers, has been negotiating since November 2022, seeking wage increases, retirement benefits, and other demands. Last July, port workers in British Columbia went on strike over issues related to wages, benefits, and training.

Shippers are also facing the potential of Canadian rail workers striking this month. The Teamsters union, representing conductors, locomotive engineers, and yard workers at both CN Rail and Canadian Pacific Kansas City Limited, is preparing for possible strike action later this month.

In the United States, ports have also faced significant industrial action. Last June, a six-year labor contract was finally agreed upon at 29 US west coast ports, concluding a difficult 13 months of stalled negotiations, walkouts, and cargo diversions to other locations.

While the US west coast ports are now stable, issues are arising elsewhere. Dozens of US industry associations called on the White House last week to help resume stalled talks between east and Gulf coast dockworkers and port operators.

Earlier this month, contract negotiations between the International Longshoremen’s Association (ILA) and the US Maritime Alliance broke down. The current agreement, covering about 45,000 dockworkers at some of the busiest US ports, is set to expire on September 30.

"With capacity already stretched thin by longer routes around Africa, additional delays and backlogs from an ILA strike, or, to a lesser extent, the looming Canadian rail strike possibly in July, would also put more or renewed pressure on ocean rates," remarked Judah Levine, head of research at Freightos, a box booking platform.