The B.C. port strike is over, but economic impact could last weeks | CBC News

British Columbia’s port strike may be over, but it will take weeks, possibly months, for supply chains and affected businesses to recover, experts say.

The Canadian Railway Association estimates that for every day ports are closed, it could take three to five days for supply chains to recover. After a 13-day shutdown, it will be at least five and a half weeks.

Some industry experts say it could take longer.

The International Union of Ports and Warehouses of Canada (ILWU) and the BC Maritime Employers Association agreed Thursday morning to a four-year interim agreement to lift the closure, with about 7,400 workers expected to return to work starting today. . Details of the agreement have not yet been made public.

Workers have been on strike since July 1 over wages, contracting and automation, halting shipments in and out of about 30 British Columbia ports. announced that 63,000 shipping containers were stranded on ships waiting to be unloaded. .

After a 10-day strike at the port of Montreal in 2020, Christina Santini, executive director of the Federation of Independent Businesses of Canada, said it took three months to close a backlog of cases.

Companies waiting for inventory are expected to wait even longer for supply chains to clear up, he said.

WATCH | B.C. Port Strike Over, But Repercussions Will Last For Weeks.

“If [businesses] I’ve been waiting for or placed an order for stock that was supposed to arrive this week, but I’m having all sorts of problems with it not arriving in stores for 3-4 weeks, if not 3 months. It’s piling up. Cost pressures need to be addressed as well,” Santini said.

Over 40% of Canadian shipments go through

The Port of Vancouver is the nation’s largest port, importing everything from cars and auto manufacturing parts to consumer goods, construction materials and raw materials. It is also an important export port for Canada’s natural resources and commodities.

“Vancouver handles 43 percent of the cargo that moves into Canada through the port system. …Vancouver is the gateway to the East,” said Business Administration, Western University Ivy School of Business, London, Ontario. Professor Fraser Johnson said.

Potash producer Nutrien has cut production at its Koli-potash mine in Saskatchewan, citing a “loss of export capacity” following the port closure.

Canadian Manufacturing Exporters (CME) estimates that about $500 million in trade was disrupted per day during the strike.

Werner Antweiler, an economics professor at the University of British Columbia’s Souder School of Business, said trade in these commodities may have been disrupted, but the money wasn’t necessarily completely lost. rice field.

He estimates the actual cost of the 13-day strike to total nearly $100 million.

“These goods are late,” he said. “While this has resulted in lost revenue and lost sales for the company, we believe these losses are still well manageable.

“It’s noticeable for some companies, especially those with a lot of time-sensitive commodities, but it’s less noticeable for those with more inventory and more headroom built into their systems that are more resilient.”

But many companies today can’t afford it, Santini said. They have less inventory and less room to negotiate any kind of disruption to their supply chain, especially in times when the cost of everything is rising.

“Inflation affects everyone, not just individuals, but businesses,” she said. “We’re losing sales because we can’t get the materials we need to make sales or provide the services we need.”

Mr Johnson said if the strike had lasted longer, consumers would have started to see the prices of goods rise. But in this case, it is likely that the companies will absorb the losses, he said.

“At the end of the day, all of this means more costs for organizations,” says Johnson. “That means companies end up with higher costs, which creates another problem in that they can spend their money elsewhere.”