US Port Strike Threat Affects Supply Chains

The prospect of a strike or lockout at America’s west coast ports that handle more than 40% of all container imports to the US are disrupting businesses’ supply chains, as shippers anticipating a stoppage divert cargo to Canadian ports.

Canada’s largest rail network has already imposed restrictions on handling goods bound for the US after a surge in cargo diverted to the ports of Vancouver and Prince Rupert in the province of British Columbia.

Last month Prince Rupert’s container imports were 22% higher than in June 2013. Canadian National Railway (CN) took the action in response to concerns that talks between US port employers and the International Longshore and Warehouse Union (ILWU) over a new contract might culminate in a strike or lockout. The port workers’ existing contract expired on 1 July.

In 2002 the expiry of a previous six-year contract led to a 10-day lockout and serious traffic disruption that ended only when the federal government intervened. The two sides later reached agreement in 2008 with only minor disruption.

Truck drivers at Los Angeles and Long Beach ports, which handle around a third of US container imports, went on strike last week in a separate dispute.

CN reported that US-bound imports through Canadian west coast ports had increased ‘noticeably’ as shippers sought to protect their supply chains against potential industrial action.

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