Yet another threat to the Canadian auto industry looms as the biggest port in Eastern Canada might be seeing disrupted shipments if dockworkers and their employers can’t agree on a new union contract.
Longshoremen at the Port of Montreal are demanding better schedules, and voted overwhelmingly against an offer from the Maritime Employers Association on March 21. While the union doesn’t intend to strike for now, they still could, and the lack of an agreement threatens to upend port operations at a time when shipments are already hampered by a global container shortage.
That could throw another wrench into the automotive supply chain and dealer inventory, which is already low because suppliers and automakers are managing a global microchip shortage, lack of seat foam, COVID-19 limitations and a jumbled world inventory of shipping containers.
“The situation in Montreal is deeply concerning,” said Brian Kingston, head of the Canadian Vehicles Manufacturers’ Association, which represents the interests of the Detroit Three in Canada.
Kingston declined to say which automakers or parts suppliers would be affected by a strike, but said the industry primarily “uses Montreal to bring automotive inputs into the country.”
According to the Port of Montreal statistics, it processed 456,650 metric tons of vehicles and accessories in 2020. The Port doesn’t break the numbers down further.
Hapag-Lloyd AG, a German international shipping and container transportation company, said in an email to customers that it expects that “terminal performance in the port will be severely impacted” just given the potential risk of workers taking action.
The shipper also said vessels could be diverted at additional costs.
Kingston said this is not the time for a strike.
“We just came out of a massive economic downturn and having a critical piece of our transportation network shut down will not help the Canadian economy recover,” he warned. “Companies aware of the potential strike are already moving cargo to different ports.
“We do not want Canada to get a reputation of being an unreliable jurisdiction when it comes to moving goods. The last thing you need is a perception that things can’t get done and product doesn’t move effectively.”
Many small and medium-sized businesses rely on shipments that pass through the Port of Montreal, the biggest in Eastern Canada. Dockworkers handled 1.6 million containers holding 35 million metric tons of goods and commodities last year. About two-thirds of the tonnage was bulk products like oil, fertilizers and iron ore.
The latest failure to reach an agreement isn’t new. In 2020, a series of rotating strikes by Montreal dockworkers caused 21 container ships to divert to other ports, and the equivalent of 80,000 20-foot containers were either grounded or rerouted.
“The good news is that the union has to give 72 hours before a strike, but they say they don’t want to [strike], yet. We’re hopeful they can get back to the table and find some sort of resolution,” Kingston said.
Michel Murray, a union representative, told a local radio station Monday that the dockworkers’ main demand is to have work schedules that will allow balance with personal lives. Employers treat longshoremen as if they were firefighters or emergency doctors, he said.
The Maritime Employers Association said it is waiting for the Federal Mediation and Conciliation Services to call, stating its priority remains to negotiate an agreement as soon as possible.
The Federal Mediation and Conciliation Services did not immediately respond to a request for comment.
Covid-19 infections among dockworkers in the United States, have threatened to worsen ship bottlenecks at some ports, highlighting the importance of dockworkers. In the United States, contracts are set to expire next year at 29 ports.
Greg Layson of Automotive News Canada contributed to this report.
