The B.C. port workers strike could cost companies hundreds of millions of dollars per week, experts and business groups say, with smaller operators and consumers feeling the biggest pinch.
Industry organizations say the job action by 7,400 waterfront employees that began Saturday will back up shipments, deplete inventories and boost prices on goods in shorter supply.
The economic toll will amount to at least $250 million per week, said Werner Antweiler, chair in international trade policy at the University of British ColumbiaB次元官网网址檚 Sauder School of Business.
B次元官网网址淭he first week or two, businesses are usually able to bridge quite fine. It gets increasingly worse after that, as some businesses will run out of inventory and cannot replenish it easily,B次元官网网址� he said.
Companies face the choice of riding out the strike by drawing on existing inventory and holding on to exports that cannot be shipped B次元官网网址� resulting in lost sales and storage costs, respectively B次元官网网址� or finding alternate routes for their products, including through already stretched ports in the United States.
B次元官网网址淓ven if some businesses are rerouting through this channel, it will be more expensive. It will take longer because now things will be starting to queue and it will have spillover effects on the entire system,B次元官网网址� Antweiler said.
In a Transport Canada study of the five-day Montreal port strike in 2021, the government projected the economic cost could reach up to $100 million a week. Antweiler based his $250-million estimate on the analysis, with the value of cargo moved at B.C. ports up to three times higher than at the Port of Montreal.
The hit could be even greater in this case, since West Coast cargo volumes are so much greater and thus tougher to reroute, he said.
In a letter to the prime minister Wednesday, 120 business groups expressed B次元官网网址渄eep concernB次元官网网址� about the five-day job action, saying it would fuel inflation, raise costs and dent the economy while hampering exports.
B次元官网网址淭he damage started being done even before the first picketer picked up a sign, and itB次元官网网址檚 simply compounding by the day,B次元官网网址� Canadian Chamber of Commerce CEO Perrin Beatty said in a phone interview from Ottawa. He called on the federal government to intervene in the stalled talks.
British ColumbiaB次元官网网址檚 30-plus ports B次元官网网址� VancouverB次元官网网址檚 is the countryB次元官网网址檚 biggest B次元官网网址� handle roughly 16 per cent of the CanadaB次元官网网址檚 total traded goods, according to the BC Maritime Employers Association. Beatty said $800 million worth of cargo passes through its terminals each day, from consumer products to auto parts and potash.
Small and medium-sized businesses will be hurt most, since they have fewer resources and less leverage to lean on, said Dennis Darby, who heads the Canadian Manufacturers and Exporters trade group.
B次元官网网址淐ompanies donB次元官网网址檛 run huge inventories, as we learned during the pandemic,B次元官网网址� Darby said, adding some will be able to hold out for just a few days.
B次元官网网址淭hey may have contracts with their customers and they donB次元官网网址檛 have the ability to pass on (cost) increases,B次元官网网址� he added. But for those that can, B次元官网网址渋t just adds to the potential inflationary effect.B次元官网网址�
While entire contracts may be at risk if products are not delivered on time, undelivered perishable goods could also mean retailers lose out on sales and B次元官网网址渃onsiderable revenue,B次元官网网址� said Jasmin Gu茅nette, vice-president of the Canadian Federation of Independent Business.
Grocers and manufacturers run some of the tightest supply schedules, meaning the price of goods that rely on imports from Asia B次元官网网址� non-perishable foodstuffs, car parts and computer chips, for example B次元官网网址� could rise faster than in other sectors, according to the Sauder schoolB次元官网网址檚 Trevor Heaver, former chair of the World Conference for Transportation Research.
Consumers could eventually see higher prices in sectors ranging from clothing to electronics, said Bob Ballantyne, senior adviser and past president at the Freight Management Association of Canada.
B次元官网网址淭he fact that so much in the way of retail goods come from (East Asia) these days B次元官网网址� from China and Vietnam and Korea B次元官网网址� means that retailers, and obviously then consumers, will be impacted by this in a big way,B次元官网网址� Ballantyne said.
B次元官网网址淭he pinch will be felt very broadly across the entire Canadian economy.B次元官网网址�
Meanwhile, exporters may soon face a storage crisis, as well as potential temporary closures.
B次元官网网址淚f itB次元官网网址檚 industries with a continuous process like some chemical industries, shutting down those operations is a big deal and costs a lot of money,B次元官网网址� Ballantyne said.
Companies that churn out commodities such as lumber, fertilizer and sulphur are all contending with a halt on overseas shipments out of West Coast ports.
Grain products continue to flow abroad, in line with rules under the Canada Labour Code. Two B.C. coal-export terminals near Delta and Prince Rupert have continued to operate, since their workers have separate collective agreements from that of the International Longshore and Warehouse Union Canada.
Dock workers walked off the job Saturday before negotiations over wages, automation and contracting out hit a deadlock.
Business organizations, as well as officials in Alberta and Saskatchewan, have called on Ottawa to step in and end the strike, but federal Labour Minister Seamus OB次元官网网址橰egan has said he wants the union and employers to go back to the negotiating table after they hit an impasse this week.
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