The diversion of cargo through Halifax, according to the Canadian Manufacturers and Exporters group, is “incurring millions in additional costs every week” for its members. Photo Credit: Shutterstock.com.
Canadian manufacturers on Monday joined an agricultural group in urging the Trudeau government to intervene and prevent the escalating dispute between Montreal port employers and longshore workers from further hurting cargo owners.
The ongoing dispute, which resulted in 19 days of strikes last summer and forced shippers to divert cargo through Halifax and other ports, sharply escalated over the weekend. Even before that escalation, the mere threat of unrest at Montreal has been causing new cargo diversions by US and Canadian shippers: Tonnage at Montreal in March was down 11 percent from the same period a year ago, while other North American ports saw double-digit year-over-year increases, thanks to the elevated import surge from Asia.
The diversion of cargo through Halifax, according to the Canadian Manufacturers and Exporters group, is “incurring millions in additional costs every week” for its members. The group said the dispute is also hampering the ability of manufacturers to get materials to produce essential goods for Canadian consumers.
“We must prevent a repeat of last summer. Supply chains, businesses, our economic recovery, and the livelihoods of hardworking Canadians cannot sustain further shutdowns,” Dennis Darby, president and CEO of the group, said in a statement.
Last summer’s closure at Montreal had a greater economic impact on Canada than the COVID-19 pandemic itself, Pierre Fitzgibbon, Quebec’s minister of economy and innovation, said days before both sides agreed on Aug. 21 to a now-expired truce.
In an April 5 letter urging Canada Labor Minister Filomena Tassi to arbitrate a final agreement if a quick resolution can’t be reached, agricultural group Pulse Canada said rerouting costs for cargo generally moving through Montreal was adding up to C$1,600 (US$1,276) more per container. Roughly 50 percent of the containerized cargo flowing through the port originates or is destined for Quebec, with the rest of the volume feeding the US Midwest and Ontario markets, according to the Montreal Port Authority.
“For shippers with no other options, rail carriers have announced to the industry that they would be reducing services to the port in order to prevent a pile-up of containers, which are in high demand worldwide,” Greg Cherewyk, president of Pulse Canada, wrote in the letter to the Labor Ministry.
Despite private pleas from industry to intervene, the Trudeau government has been reluctant to get directly involved, choosing to allow both sides to work it out, as it did with the roughly three-week-long blockades of railroads by some indigenous groups in early March 2020. But the recent escalation of tactics by employers and longshore workers — the cutting of wages and overtime/weekend shifts, respectively — raises the prospect that the federal government will intervene.
“As governments are investing billions of dollars to restart the economy, it doesn't make any sense to allow a slowdown of operations at the Port of Montreal. This is why we need the federal government to intervene,” Darby said.
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