Major economic and logistics impacts
A month away from the truce ending between the dockworkers’ union CUPE 375 and the Maritime Employers Association
Major economic and logistics impacts for Quebec and Ontario businesses that use the Port of Montreal
Montreal, February 17, 2021 — As the negotiation process is currently suspended and the truce between the dockworkers’ union CUPE 375 and the Maritime Employers Association (MEA) draws to a close, and in the context of an unprecedented pandemic that the Canadian economy must continue to face, the Montreal Port Authority (MPA) hopes that the parties will quickly reach an agreement to avoid a new work stoppage by the dockworkers. Already, the Port of Montreal’s user companies and clients are feeling the impacts.
Nearly a month before the end of the truce between the employer and the union, scheduled for March 21 at 6:59 a.m., the MPA has found that several Quebec and Ontario businesses that use the Port of Montreal, including some that move critical cargo to combat COVID-19, are already diverting containerized goods to other ports, and that others are planning to do so if a new work stoppage occurs soon.
This situation, similar to the 19-day work stoppage during the summer of 2020 when dozens of companies publicly disclosed the impacts on their operations, could cause major delays in the supply chain and higher freight costs, right as the economic recovery and a broader reopening of the retail sector in Quebec and Ontario get under way.
Reminder of the impacts of the strike episodes in the summer of 2020
Keep in mind that, according to Statistics Canada, the backlogs and delays caused by the dockworkers’ strike in 2020 cost wholesalers $600 million in sales over a two-month period. Furthermore, a survey conducted in August 2020 by the Canadian Federation of Independent Business found that 40% of Quebec SMEs suffered negative impacts due to the situation.
These work stoppages have significantly affected operations in the container sector: more than 20 container ships have been diverted to competing ports and about 80,000 twenty-foot equivalent units (TEUs) grounded or rerouted. Altogether, it took over three months (85 days) to clear these backlogs and return to what could be considered normal operations.
Beyond port operations, according to the Logistics and Transportation Metropolitan Cluster of Montreal CargoM, over 6,000 transportation and logistics businesses in Greater Montreal are directly or indirectly affected by a strike at the Port of Montreal.
Last is the matter of handling critical cargo needed to fight the pandemic. With CargO2ai, a system that uses artificial intelligence to accelerate the delivery of containers containing critical medical equipment, in 2020 the Port of Montreal handled more than 2,500 containers, or about 20 containers per port call. During the general strike (August 10 to 22, 2020), not a single critical container on the ground was moved.
The Port is an essential service
Port activities are essential to keep the economy running smoothly and for the supply of food and other basic goods, among other things.
A halt in port operations and the diversion of goods to competing and more distant ports have direct and serious repercussions for the economy of Greater Montreal, for Canadian businesses that depend on international trade and, ultimately, for the supply of goods and products to citizens.
About the Port of Montreal
Operated by the Montreal Port Authority (MPA), the Port of Montreal is the second largest port in Canada and a diversified transshipment centre that handles all types of goods: containerized and non-containerized cargo, liquid bulk and dry bulk. The only container port in Quebec, it is a destination port served by the largest shipping lines in the world. It is also an intermodal hub with a service offering that is unique in North America, featuring its own rail network directly dockside connected to Canada’s two national rail networks. The MPA also operates a Cruise Terminal and a Port Centre.
The MPA factors economic, social and environmental components into its corporate initiatives. This commitment is governed by a sustainable development policy whose guiding principles focus on involvement, cooperation and accountability. Port activity supports 19,000 jobs and generates $2.6 billion in economic benefits annually.
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