May 3, 2021

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Montreal Port Strike - Latest Updates

Monday, 05/03/2021  Canada Parliament approved the return to work bill to start working after five days of strike on Sunday, May 2, 2021. Although the port opened yesterday, no vessel operations were expected to start until today, May 3rd. Delays are expected to continue for the next few days as sailings begin to normalize. Transit time delays are expected to continue. There are currently ten vessels (almost 20,000 TEU) to work on. However, the reopening of operations will help to avoid port congestion in Halifax and St. Johns that plagued importers last fall. 

The ongoing absence of a new contract to replace the one that expired at the end of 2018 created uncertainty for Canadian and U.S. midwest shippers, as reflected by a 19-day series of strikes last summer as well as the most recent action. So, this may not be over as the union is threatening to take the government to court over the ruling. 

Wednesday, 04/28/2021 Legislation is now tracking in the Canada Parliament to have port Labour return to work.

The Bill is scheduled to pass later tonight in the House of Commons. Then, the Bill goes to the Senate tomorrow.

The expectation is if the legislation is approved tomorrow, that could mean the port reopens Friday-Saturday, April 30-May 1 (this is a best-case scenario).

Port of Montreal remains closed today, Wednesday, April 28th, and contingency plans are in motion.

Once the port reopens, customers should add sufficient time in your supply chains for the inherent start-up period after a port closure.

Monday, 04/26/2021 All port workers affiliated with the Canadian Union of Public Employees will be on an unlimited general strike. The port of Montreal will not be working until further notice.

Since the MEA submitted their two counter proposals on April 15th, there has not been a single day of negotiations. With each passing day, the port becomes further congested, and the situation becomes more critical.

At this moment, carriers are evaluating their options. Official announcements are expected to be sent out with vessel diversion action and additional inland fees.

Friday, 04/23/2021 The Longshoreman union submitted its 72-hour strike notice to the Maritime Employers Association (MEA).

Tuesday, 4/16/2021 Longshoremen at Montreal began a partial port strike refusing to work overtime on weekends.

This Partial work stoppage will quickly result in significant port congestion impacting the Port’s fluidity of the logistics chain. This is expected to affect all traffic moving through the Port.

Another full strike is an increasingly likely possibility. The longshoremen, represented by the Canadian Union of Public Employees (CUPE) 375, struck for 12 days last summer after talks with the Maritime Employers Association (MEA) failed to produce a contract. The strike ended with a seven-month truce that expired in March.

The labor dispute is hurting the port and the wide swath of the Canadian economy that relies on it. The Montreal Port Authority said cargo volumes fell by 11% in March – this at a time when competitors in Canada and the U.S. are contending with a deluge of container traffic spurred by COVID demand.

The Port of Montreal handled 35.1 million metric tons of cargo and bulk products in 202. More than 40% of that came from containers. That translated into 1.6 million 20-foot equivalent units (TEUs) worth of containers. On the West Coast, only the Port of Vancouver handled more among Canadian ports — 3.5 million TEUs. According to the Montreal Port Authority, around $80 billion worth of goods goes through the port each year. CMA-CGM, MSC, Hapag Lloyd, Cosco, Maersk, OOCL, and Falline are the shipping lines that serve the port. As of this moment, no carrier has announced any Vessel Diversion Action.

One of Montreal’s selling points is its inland location. It is within quick reach of Toronto, one of North America’s largest freight markets, and the Midwest U.S. As many as 2,500 trucks serve the port daily, while CN (NYSE: CNI) and Canadian Pacific (NYSE: CP) provide on-dock rail service. Montreal also offers one of the quickest ways for vessels to reach North America from the Mediterranean. The port also has served as the main hub for the growing trade between Canada and the European Union under the Comprehensive Economic and Trade Agreement (CETA).

During the 2020 strike, vessels and cargo diverted to Halifax, Saint John, and New York-New Jersey. The strike also led to months of container backlogs. But there is one big difference between then and now: Port congestion is a lot worse.

The longshoremen have been without a contract since 2018. It is not clear exactly why CUPE and the MEA have not agreed on a new one. Neither side has made the details public. But union officials have given some hints: working conditions and work-life balance. The longshoremen and port operators have a long history of ugly disputes. The 2020 strike came 10 years after another contract fight led to a lockout. But there was hope that the truce that ended the 2020 strike would lead to a new contract. Instead, they seem to be back where they started.

Canadian industry groups are calling on for Prime Minister Justin Trudeau’s government to step in to end the partial strike.

Sources: Freightwaves.com