General

More than 99% of International Longshore and Warehouse Union Canada workers whose jobs are critical to West Coast port operations voted in favor of a labor strike, according to CNBC.

What’s going on: “The vote, which took place on June 9–June 10, occurred during a 21-day cooling-off period between the British Maritime Employers Association and ILWU Canada. Negotiations with the Federal Maritime Conciliation Service started on March 28. Two mediators appointed by the Canadian government were overseeing the discussions that ran through the end of May.”

• June 24 is the soonest a strike would occur.

In the U.S.: The Canadian development—which threatens the Port of Vancouver, the largest port in Canada—comes as tensions rise in the U.S. between the ILWU and the Pacific Maritime Association, which have been negotiating a labor contract since May 2022.

Why it’s a problem: About 15% of container trade that comes through the Port of Vancouver is destined for or coming from the U.S.

• “Canadian shippers could shift trade to the neighboring Port of Seattle, but the Port of Seattle has been significantly impacted by labor slowdowns and work stoppages which led to its closure on Saturday as the ILWU in the U.S. continues to negotiate with the Pacific Maritime Association for a new contract, with wages and automation proving to be sticking points.”

Why it’s important: The events in Canada are “a significant blow to operations on the West Coast,” ITS Logistics Vice President of Drayage and Intermodal Paul Brashier told the Journal.

• “These ports are vital to Midwest manufacturers and the auto industry, as most transpacific freight enters at these points prior to interlining to rail and going to inland rail ramps in Chicago and other major markets. More significant is that these ports were used as relief valves to avoid ILWU activity.”

Our view: The NAM has been recommending White House intervention in the U.S. labor dispute for many months.

• “[With] the dramatic impact of port closures, your leadership and intervention are needed,” NAM President and CEO Jay Timmons told President Biden last week. “Manufacturers respectfully encourage you to bring the parties back together and reach a final agreement that reopens our West Coast ports and eliminates the threat of additional supply chain disruptions.”