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Canadian Port Strikes Continue to Impact Freight: Rail Operations, Potential Shift to Airfreight, and Price Increases for Consumers.

Jul 13, 2023

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Container imports expected to peak in August. According to the National Retail Federation‘s Global Port Tracker report, container imports in the U.S. are expected to peak in August at a little over 2 million TEUs before slowly backing off. This comes as retailers are monitoring labor disputes that could cause supply chain disruptions, according to gCaptain.

Blank sailings hit lowest since pandemic beginning. The number of blank sailings are at their lowest point since the pandemic started in 2020, according to SupplyChainDive. When ocean shipping markets were at their lowest state, one in four sailings from Asia to North America’s West Coast was being canceled. Sea-Intelligence has found that as of June, the figure had fallen to less than 10%. “Shippers operating in the market now should take the current state of affairs as being very normal indeed,” said Sea-Intelligence CEO Alan Murphy.


Canadian Labor Minister says end to port strike is near. About 7,400 dockworkers with the International Longshore & Warehouse Union Canada’s Longshore Division are on their second week of striking following failed labor contract negotiations with the British Columbia Maritime Employers Association. The effects of the strike at West Coast ports in Canada are being felt across the supply chain. Container cargo traffic at two of Canada’s busiest ports, Vancouver and Prince Rupert, is being heavily affected, at a cost to trade estimated by an industry body to run into $377 million each day. Canadian Labour Minister Seamus O’Regan said on Tuesday that a bargaining agreement will soon be within reach to end the dispute.

Marine fuel contamination discovered in Houston. A case of marine fuel contamination in Houston, Texas, was uncovered by fuel testing company Veritas Petroleum Services (VPS). The company says the contaminated fuel was delivered by a single supplier between March and May of this year, according to gCaptain. The contamination was not detected until after it was burned several weeks after bunkering, and so far eleven vessels using the fuel have reported a loss of power and subsequent loss of propulsion.


Diesel benchmark price increases after weeks of decrease. The diesel price the Department of Energy/Energy Information Administration uses as the basis for most fuel surcharges rose 3.9 cents a gallon to $3.806 this week for the first increase in three weeks. The reversal of recent trends came as “gains in the broader oil market have been significant and sustained enough that some analysts say the weak market that has been the driving force for most of the first half of the year might have run its course,” according to FreightWaves.


Freight rail operations impacted by Canadian port strikes. Canadian railway CN has taken steps to help mitigate service disruptions to Canada’s West Coast supply chains, “as well as the likelihood of related impacts across the CN network. Those steps include preventing the flow of certain traffic and reducing intermodal customer capacity allocations to British Columbia ports,” the railway told FreightWaves. CN said that a stoppage can create disruptions that could take weeks or longer to correct because of the close relationship of port and rail corridors. “At a time when Canadians are battling inflation and working to keep our economy strong, this could result in increased shipping and consumer costs. It is therefore critical to keep the economy moving and get ports opened again,” CN said.


Canadian port strikes could result in shift to airfreight. The Airforwarders Association (AfA) has warned that ongoing strike action in Canada has the potential to result in a shift of cargo from sea to air. AfA executive director Brandon Fried said that if the strike action continues then “airports in Canada and the US could see an influx of diverted cargo in an effort by shippers to avoid congestion and delays,” according to AirCargo News. “…Airports in Canada and the US will likely see substantial volume increases as shippers try to avoid those ports affected while keeping their products moving” if the Canadian government does not intervene before the situation becomes worse, Fried said.


UK to sign New Zealand trans-pacific trade deal. The UK will formally become the first new member of New Zealand’s trans-Pacific trade agreement since the framework came into force, after signing a deal in Auckland next weekend. The signing will take place at a ministerial meeting of members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, hosted by New Zealand, according to a press release from the country’s ministry of foreign affairs and trade. “The United Kingdom’s membership of CPTPP sits alongside our bilateral Free Trade Agreement to ensure that Kiwi exporters have unprecedented access to the sixth largest economy in the world,” Damien O’Connor, New Zealand’s minister for trade and export growth, said in a statement Saturday. The existing members are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.


Consumers could see higher prices as a result of Canadian port strikes. Trade associations in the U.S. and Canada are warning the effects of the Canadian port strikes could inflate prices and cause delays in product arrivals. It could take an estimated three to five days for every day the strike lasts for networks and supply chains to recover, according to the Railway Association of Canada. Costs from having to divert ships to the U.S. and extra fees, such as rail and trucking fees, customs fees, and port fees, could contribute to heightened costs for consumers in the coming months.