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 Columbia91裸聊视频檚 Sauder School of Business.
91裸聊视频淭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,91裸聊视频� 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 91裸聊视频� resulting in lost sales and storage costs, respectively 91裸聊视频� or finding alternate routes for their products, including through already stretched ports in the United States.
91裸聊视频淓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,91裸聊视频� 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 91裸聊视频渄eep concern91裸聊视频� about the five-day job action, saying it would fuel inflation, raise costs and dent the economy while hampering exports.
91裸聊视频淭he damage started being done even before the first picketer picked up a sign, and it91裸聊视频檚 simply compounding by the day,91裸聊视频� 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 Columbia91裸聊视频檚 30-plus ports 91裸聊视频� Vancouver91裸聊视频檚 is the country91裸聊视频檚 biggest 91裸聊视频� handle roughly 16 per cent of the Canada91裸聊视频檚 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.
91裸聊视频淐ompanies don91裸聊视频檛 run huge inventories, as we learned during the pandemic,91裸聊视频� Darby said, adding some will be able to hold out for just a few days.
91裸聊视频淭hey may have contracts with their customers and they don91裸聊视频檛 have the ability to pass on (cost) increases,91裸聊视频� he added. But for those that can, 91裸聊视频渋t just adds to the potential inflationary effect.91裸聊视频�
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 91裸聊视频渃onsiderable revenue,91裸聊视频� 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 91裸聊视频� non-perishable foodstuffs, car parts and computer chips, for example 91裸聊视频� could rise faster than in other sectors, according to the Sauder school91裸聊视频檚 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.
91裸聊视频淭he fact that so much in the way of retail goods come from (East Asia) these days 91裸聊视频� from China and Vietnam and Korea 91裸聊视频� means that retailers, and obviously then consumers, will be impacted by this in a big way,91裸聊视频� Ballantyne said.
91裸聊视频淭he pinch will be felt very broadly across the entire Canadian economy.91裸聊视频�
Meanwhile, exporters may soon face a storage crisis, as well as potential temporary closures.
91裸聊视频淚f it91裸聊视频檚 industries with a continuous process like some chemical industries, shutting down those operations is a big deal and costs a lot of money,91裸聊视频� 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 O91裸聊视频橰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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