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U.S. congestion trends spike despite deal at Canadian ports

After roughly a month-long contract dispute, the ILWU Canada and the B.C. Maritime Employers’ Association (BCMEA) once again announced a fresh tentative labor deal at Canada’s West Coast ports on the night of July 30. However, the new contract needs to be ratified by dockworkers who have already rejected the previously proposed agreement twice.

Details about the new deal remain unavailable at the time of reporting, however, this has significantly reduced the risk of potential future strikes at the Canadian ports. The latest contract was reached with the help of the government-led Canada Industrial Relations Board (CIRB). Both the union and its maritime employer announced the breakthrough in a joint statement and agreed to recommend it to their members for ratification.

Federal Labor Minister Seamus O’Regan ordered CIRB to intervene in labor negotiations as an independent arbitrator to end the labor dispute after dockworkers voted to reject the mediated agreement for the second time on July 28. The ILWU confirmed that the earlier deal was rejected due to uncertainty related to the maintenance work at the ports, which was a critical issue in the labor dispute.

The CIRB was directed to enforce final binding arbitration if both sides fail to reach a negotiated deal this time. The CIRB warned the ILWU leadership not to backtrack on the new labor deal, and to hold its ratification vote with members by August 4. The dockworkers are not allowed to resume their strike at the ports during the ratification process. Currently, all British Columbia ports including the ports of Vancouver and Prince Rupert remain operational.

Previously, the 13-day strike by the Canadian port workers caused trade disruptions valued at over $10.6 billion across North America. The strike has impacted several big and small businesses across Canada and the United States. Canadian Pacific Kansas City Limited estimated that the B.C. port strike had a negative impact of approximately $80 million in revenue.

Congestion trends

Congestion metrics for the combined West Coast ports have fallen after several weeks of elevated numbers. Average combined waiting times and vessel counts have both fallen driven by decreased congestion at the Port of Los Angeles-Long Beach and the Port of Seattle. Average wait times at the Port of Vancouver stand above the three-month average for the port.

Congestion has increased for Gulf Coast ports driven by increases in average waiting times at the Port of Houston, the Port of Mobile and the Port of New Orleans. East Coast ports are maintaining low congestion metrics.

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