The British Columbia port strike might be over, but it’s expected to take weeks — even months — for supply chains and affected businesses to recover, according to experts.
The Railway Association of Canada estimates it could take three to five days for supply chains to recover for each single day the port was shuttered. Following a 13-day shutdown, that’s at least 5½ weeks.
Some industry experts say it could take even longer.
The International Longshore and Warehouse Union Canada (ILWU) and the B.C. Maritime Employers Association agreed to a tentative four-year deal on Thursday morning to end the shutdown, and about 7,400 workers are expected to be back at work today. The details of that agreement haven’t been made public yet.
The workers had been on strike since July 1 over wages, contracting and automation, halting shipments in and out of about 30 ports in B.C. The Greater Vancouver Board of Trade has said there are 63,000 shipping containers stuck on vessels waiting at B.C. ports to be unloaded.
Following a 2020 strike at the Port of Montreal lasting 10 days, there was a backlog that took three months to clear, said Christina Santini, executive director of the Canadian Federation of Independent Business.
Businesses awaiting stock could expect to wait even longer before supply chains are clear, she said.
B.C. port strike is over, but it will take weeks to clear the backlog of goods
As the union and employer reach a tentative four-year deal, B.C. port workers are back on the job after nearly two weeks on strike. Now, all eyes are focused on when goods and supplies can start moving again.
“If [businesses] were anticipating or had ordered stock that was supposed to come in this coming week, and now won’t be coming in to their store for another three, four weeks, if not three months, it creates a whole bunch of different issues for them to deal with, as well as cost pressures,” said Santini.
More than 40% of Canadian shipping passes through
The Port of Vancouver is the country’s largest, bringing in everything from cars and car-manufacturing parts, to consumer goods and construction materials, to raw materials. It’s also a key export port for Canada’s natural resources and commodities.
“Vancouver handles 43 per cent of the cargo that’s shipped into Canada via the port system.… It’s a gateway to the East,” said Fraser Johnson, a professor of operations management at the Ivey School of Business at Western University in London, Ont.
Nutrien Ltd., which produces potash, reduced production at its Cory potash mine in Saskatchewan because of “loss of export capacity” associated with the port closures.
During the strike, the Canadian Manufacturers & Exporters (CME) estimated about $500 million of trade was disrupted daily.
While the trade of those goods may have been disrupted, it’s not necessarily money that’s been completely lost, said Werner Antweiler, a professor of economics at the Sauder School of Business at the University of British Columbia.
He estimates the actual cost of the 13-day strike is closer to a total of $100 million.
Christina Santini is the executive director of the Canadian Federation of Independent Business. (Submitted by Christina Santini)
“These goods are delayed,” he said. “This has caused some revenue losses and some sales losses to businesses but … I reckon that these losses are still quite manageable.
“Noticeable for some businesses, especially those that have tons of time-sensitive goods; less noticeable for those that have more inventory and more slack built into the system and have more resilience.”
But many businesses today have less slack, said Santini. They carry smaller inventories and have less room to negotiate any kind of disturbance to the supply chain — especially at a time when everything is costing more.
“Inflation’s affecting everyone — not just individuals, but also businesses,” she said. “They’re losing out on sales because they’re not getting the materials they need to make those sales or to deliver the services they would need to do.”
Had the B.C. port strike gone on much longer, experts say consumers may have started to see the costs of their goods rise. (Darryl Dyck/The Canadian Press)
Had the strike gone on much longer, Johnson said consumers would have started to see the costs of their goods rise. But in this case, he said, it’s likely to be the businesses that soak up any losses.
“At the end of the day, all these things mean higher costs for organizations,” said Johnson. “So that means that companies end up eating the higher costs, which creates other problems, in terms of their ability to spend money elsewhere.”
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
