Manufacturing supply chains will take weeks to recover from B.C. ports strike

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It is estimated that one day of a port shutdown takes up to a week to make up for after the fact, meaning it will take months for Canadian manufacturing supply chains to recover. PHOTO courtesy CP Rail.

Labour peace may have been restored to B.C.’s ports but the impact of the 14-day strike action on the nation’s manufacturing supply chains could be felt for months, warns Canadian Manufacturers & Exporters (CME)

The 14 day-long strike has caused severe backlogs that will take weeks to process, CME says. The damage to manufacturing supply chains is significant, as production slowed in the lead up to the strike and will take even more time to get back up and running. It is estimated that one day of a port shutdown takes up to a week to make up for after the fact, meaning it will take months for the sector to recover.

“While we are relieved this current crisis appears to be over, the work of manufacturers is not done. They will be spending the next several months sorting through the damage and getting caught up. The total cost to our industry is not just the days of the strike, but the days and months of work that precede and follow a disruption” said Dennis Darby, President and CEO of CME. “This is why we need reforms that will avoid a complete shutdown of Canada’s transportation system and supply chains every six months.”

CME conducted a survey of its members that showed the ports strike in British Columbia had a severe impact on their businesses and the Canadian economy. The poll was conducted between July 11 and July 13, 2023, and received input from manufacturers from across the country.

Nearly two-thirds of manufacturers in Canada said the strike affected their operations now, while another 28 per cent of respondents said it was only a matter of time until they experienced problems themselves. Of those impacted, just under 70 per cent said the impacts were “significant” to “severe”. Costs to individual manufacturing businesses experiencing delays were reported to be on average of $207,000 per day.

Nine out of 10 affected manufacturers said the strike disrupted their supply of raw materials or components, while 70 per cent reported that it negatively impacted their relationships with customers, hurting already fragile supply chains.

While the results of this survey revealed the reputational and economic costs of the strike, CME also asked what reforms manufacturers would like to see to prevent future labour disruptions. An overwhelming 95 per cent said they are in favour of reforms that that would allow the government to impose binding arbitration on striking workers, while another 97 per cent of respondents want the government to treat critical aspects of Canada’s transportation system as essential services.

“While the strikes at the ports in BC were today’s priority, CME and its members are more interested in hammering out long-term solutions with the federal government, organized labour, and the major transportation providers to avoid constant disruptions,” said Darby. “We must all work together to devise a new way of conducting labour negotiations where manufacturers and all other businesses are not the ones always paying the economic costs for situations completely beyond their control.”

Close to 7,500 dock workers went on strike July 1. The strike action snarled shipments in and out of about 30 ports in B.C., including the Port of Vancouver, Canada’s largest port and caused manufacturing groups such as Canadian Manufacturers & Exporters to call for the federal government to step in.

The International Longshore and Warehouse Union Canada and the B.C. Maritime Employers Association have agreed to a tentative four-year deal provided to them by the federal mediator. The agreement still needs to be ratified however by both sides.

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