U.S. port strike will have ‘absolutely massive’ impact on Canada. Here’s why | Globalnews.ca

Dockworkers across the eastern United States are joining their peers on strike at Montreal ports as a fresh wave of labour action grips North American supply chains.

Workers at 36 U.S. ports from Maine to Texas took to the picket lines early Tuesday in a strike over wages and automation.

The contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight.

Workers at the Port of Philadelphia walked in a circle outside the port and chanted, “No work without a fair contract.” The union, striking for the first time since 1977, had message boards on the side of a truck reading, “Automation Hurts Families: ILA Stands For Job Protection.”

The U.S. Maritime Alliance (USMX), which represents the ports, said Monday evening that both sides had moved off of their previous wage offers. But no deal was reached.

U.S. President Joe Biden said in a statement Tuesday that he urged USMX “to come to the table and present a fair offer to the workers.” His statement cited the “record profits” carriers have made since the pandemic shutdowns and argued it was time for workers to share in those benefits.

0:45
Port of Montreal longshore workers start 3-day strike

He added that his administration will be watching for evidence of “price gouging” that would benefit the foreign-owned carriers behind the USMX, as well as its board.

“It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback,” Biden said.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

Montreal’s dockworkers meanwhile began a 72-hour strike on Monday. That action shut down two terminals that handle some 40 per cent of container traffic at Canada’s second-largest port.

The union local, affiliated with the Canadian Union of Public Employees, says the pressure tactic aims to lend weight to demands around regular scheduling and higher wages.

On Sunday, the Maritime Employers Association (MEA) said it had tried “all possible means” of avoiding a strike, including in mediation and at an emergency hearing before the Canada Industrial Relations Board that afternoon.

The pair of strikes land at a pivotal time with the U.S. presidential election weeks away and the broader North American economy slowing under the weight of higher interest rates.

Recent confidence that inflation has come back under control — a trend that’s led central banks on both sides of the border to kick off interest rate cuts — could be at risk amid the strikes.

Retail analyst Bruce Winder told Global News that a U.S. ports strike has an “absolutely massive” impact on retailers.

Perishable goods like fruits and vegetables are top of the list for disruption, Winder says, as well as automotive and chemical products coming in from Southeast Asia.

The ultimate inflationary impact will depend on how long the strike lasts, he explains.

A Moody’s analysis shared by the firm with Global News last week said a U.S. ports strike “lasting more than a week or two would result in rising prices and noticeable shortages of manufacturing inputs and retail goods.”

It said the automotive sector would struggle as inventories of imported components dwindle, and agricultural imports and exports would slow.

The Canadian Chamber of Commerce says $3.6 billion worth of goods and services cross the U.S.-Canada border every day. A large amount of imports come into Canada through the U.S. East Coast ports, which are able to handle far more capacity than the Port of Halifax and Port of Montreal, the main Canadian shipping points on the Atlantic.

A shutdown of those U.S. ports would threaten the delivery and viability of much of those goods, business groups say.

“There’s a lot of concern,” Pascal Chan, the Canadian Chamber of Commerce’s senior director of transportation, infrastructure and construction, told Global News.

“Any significant disruption can really jeopardize the livelihoods of workers across multiple industries on both sides of the border.”

1:40
Grain workers strike worries farmers during harvest season

Winder says that the holiday shopping season won’t feel the brunt of any impacts up front, with many retailers already getting their year-end stock in place. But reorders on any of these goods for later in the season could disrupt sales on Black Friday, he notes.

Business groups are also eying a potential shutdown at ports in British Columbia, where dockworkers informed their employer early this month that they had approved their own strike mandate.

A strike by 7,400 B.C. dockworkers dragged on for 13 days in July 2023, shutting down the country’s biggest port and costing the economy billions of dollars.

Last October, an eight-day strike by employees on the locks of the St. Lawrence Seaway halted shipments of grain, iron ore and gasoline along the trade corridor.

And in Montreal, longshore workers went on strike for five days in April 2021 and in August 2020 in a 12-day job action that left 11,500 containers languishing on the waterfront.

— with files from Global News’s Sean Boynton, Anne Gaviola, the Canadian Press and the Associated Press

&copy 2024 Global News, a division of Corus Entertainment Inc.