A gantry crane stands in the DP World Ltd. terminal at Port Metro Vancouver in Vancouver, British Columbia, Canada, on Wednesday, Sept. 19, 2018.
Darryl Dyck | Bloomberg | Getty Images
The strike at the Canada’s West Coast ports is over, after both the labor union and port ownership accepted a deal presented by federal mediators. ILWU Canada union workers were expected to be back on the job for the 4:30 p.m. Pacific time shift on Thursday, but undoing the damage to the supply chain from close to two weeks of strike will take weeks.
In a statement posted to Twitter announcing that a deal had been reached, Canadian Labor Minister Seamus O’Regan and Transport Minister Omar Alghabra said, “The scale of this disruption has been significant.”
While the production ramp down at the ports was seen immediately, the congestion as a result of the 13-day strike will have a lasting effect on ports. The ramping back up takes weeks before efficiencies will be regained. By combing the wait time of vessels getting into port and unloaded, and containers loaded onto the rails, combined delays can extend from a month to at least two months for a U.S. arrival.
The International Longshoremen and Warehouse Union of Canada begin its strike on July 1. Negotiations between the ILWU Canada and the British Columbia Maritime Employers Association were tense, but O’Regan saw differences as bridgeable, leading him to push federal mediators on Tuesday to come up with a proposal both sides could agree to.
With no vessels serviced for 13 days, according to VesselsValue, the number of vessels waiting at Prince Rupert are four, and the number of vessels waiting to enter Vancouver at nine. The combined value of trade floating offshore is $7.5 billion. There were more vessels waiting, but they left anchorage to go to U.S. ports.
Supply chain impacts
In a recent HLS Transpacific Market Report, the company warned clients that the work stoppage at the terminals has delayed the loading and transfer of the containers to railways. “As 15% of import volume going through Vancouver and around 65% of Prince Rupert volume are sent to the US destinations, the US Inland Port Intermodal routings will be heavily impacted,” it wrote.
HLS said shippers are expected to reroute some imports to U.S. West Coast ports. Carriers have cancelled callings at Vancouver and Prince Rupert, which also means further vessel capacity cuts.
The ports strike has already damaged the U.S. supply chain. In data released Wednesday, the American Association of Railroads reported year-over-year intermodal Canadian rail was down almost 50% last week as a result of the strike. The top sectors impacted included forest products such as lumber and wood products, oil and petroleum products, non-metallic minerals such as crushed stone, sand, stone, clay, and glass products, and chemicals. Products that go into paints, coatings as well as acids from Asia, were the most impacted, according to the National Association of Chemical Distributors.
The National Association of Chemical Distributors told CNBC its members likely have tens of millions of dollars in inventory stuck on ships outside of the Port of Vancouver.
“Many of our members are re-booking through U.S. West Coast ports with the likelihood of an extra 10-14 days of ground transit time because of the redirect,” said Eric Byer, CEO of the National Association of Chemical Distributors. “Some member company products have been on the water since June 30 and other arrivals earlier this month are now not being slated to be unloaded until early to mid-August at the earliest,” he said.
Products stuck on the water include essential food additives such as dextrose, guar gum & sorbates, citric acid — agriculture, food, cleaning/HI&I, personal care, sodium sulfite & sodium metabisulfite — water purification, dry caustic soda — used in metal working, food equipment cleaning, and a variety of other applications — and iron oxide, which is used as a pigment. Byer said one member company informed him it is now planning for an extended supply chain disruption through October for Canada.
Billions of dollars in trade tied up
Approximately $572 million in container trade arrives daily in the U.S. from Canada, according to U.S. Census data. Between January 2022 and May 2023, total monthly U.S. goods imported from Canada ranged from $31 billion to nearly $41 billion. Top commodity imports for May included mineral fuels, vehicles, and computer-related machinery. Holiday items, sneakers, apparel, and home goods are also being imported into Canadian ports for U.S. companies.
The U.S. and Canada have a historically strong trade relationship: Each country is the other’s top trading partner. Approximately 20% of U.S. trade arrives in the Canadian ports of Vancouver and Prince Rupert, where strikes broke out after union leadership and industry representatives failed to reach a deal before a cooling-off period expired. The Canadian Chamber of Commerce estimates $605 million in trade moves through one of those two ports daily.
During the strike, it was estimated that it would take three to five days for every day the strike lasted for networks and supply chains to recover, according to the Railway Association of Canada. With the strike ending on its thirteenth day, delays for rail containers can be anywhere from 39 to 66 days. This does not include the delays in vessels waiting to get processed, which would add multiple additional delays.
The British Columbia Maritime Employers Association said in a statement after the deal was announced that it “regrets the significant impact this labour disruption has had on the economy, businesses, workers, customers and ultimately, all Canadians. We must collectively work together to not only restore cargo operations as quickly and safely as possible but to also rebuild the reputation of Canada’s largest gateway and ensure supply chain stability and resilience for the future.”
ILWU Canada could not be immediately reached for comment.
Vessel diversions to U.S. continue
There are now five vessels identified by eeSea that diverted away from Vancouver to U.S. ports — the MSC Sara Elena, Ever Safety, COSCO Africa, Calandra, and MSC Brunella. These five vessels have been worked on by ILWU U.S. West Coast workers.
ILWU president Willie Adams, visited Canada a second time since July 4 to attend a union rally Sunday. He told CNBC in a recent statement that union workers will not serve any rediverted vessels, but there are situations in which it is difficult for union workers to know the origin of cargo.
Logistics managers have been able to reassign the destination of containers from Canada to the United States on vessels. It takes around five days for the changes to be made. U.S. Customs also needs to be alerted and approve the container. One way the union can be alerted to diverted containers is by the number of containers being unloaded on a vessel.
Vessels regularly arrive at the same ports and there is a ballpark number of containers that are unloaded. If 500 containers are normally unloaded, and the current port call now has 900, chances are there are diverted containers on the vessels. Other than that, it would be difficult for the ILWU to identify containers that had their final destinations changed because union workers do not have access to container information for security reasons.
The rash of vessels flipping their port schedules, leaving Vancouver for U.S. ports to supposedly go back to Vancouver has increased to nine, according to eeSea. The schedule can change after being discharged at the U.S. port service. It’s likely that many of the vessels that flipped their schedules will not go back to Canada. That is what happened with the MSC Sara Elena, which was worked on in Seattle. After the service, the carrier announced it would not be heading back to Vancouver, which means the Canadian-bound freight was unloaded or will be unloaded in future U.S. ports.
Key sticking points in the talks included the assignment of work to third-party companies and wages. The ILWU has stressed wages are not keeping up with inflation. It says the real purchasing power of longshore wages has fallen 2.5% since 2017, and longshore wages have grown slower than wages in the overall Canadian economy.
No terms of the deal were disclosed.
On Wednesday, the Bank of Canada raised its benchmark interest rate to a 22-year high, of 5%, and provided hawkish commentary about more hikes potentially being needed in its effort to fight inflation, even as consumer prices have come down from last year’s highs.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
