TIT-FOR-TAT IN MONTREAL

In July 2020, a dispute between terminal operators and the Local 375 of the Canadian Union of Public Employees (CUPE) erupted at the Port of Montreal. There had been no contract in force since the end of December 2018, when the previous collective bargaining agreement expired.

Work stoppages occurred throughout August 2020 before the striking workers subsequently agreed a seven-month truce with employers while a new collective bargaining agreement was to be negotiated, with no further lockouts or strikes happening.

The impact of the strike action undertaken was severe. An extensive backlog occurred, and more than 20 container ships were diverted, impacting the movement of an estimated 80,000 TEU and ultimately taking three months before operations stabilised in the Port of Montreal.

CARGO DIVERSIONS UNDERWAY

At the time of the truce commencing, it was hoped that the new contract would be in force before the end of March 2021. Unfortunately, this has not happened. Longshoremen unanimously rejected the contract proposal from the Maritime Employers Association. There were several key steps leading up to this.

The talks were suspended in early March when the employers’ association submitted a comprehensive offer in an effort to put an end, finally, to the bargaining process. However, at a subsequent general meeting held at the end of March 2021 by the workforce, the proposal was soundly rejected by 99.7 percent of the dockworkers, when 1,023 votes (of a total of 1,120 members of the union) were cast. Of those members voting, 1,020 dockworkers rejected the employer’s offer and only two voted to accept it (with one abstention). Clearly, a tremendously overwhelming rejection of the offer on the table.

Immediately after the March 2021 vote, the workforce unions confirmed there was no intention to submit a strike notice, which is the mandatory step to bring about a work stoppage. However, some shipping lines reacted, regardless, and confirmed an intention to divert ships, with Halifax a major option of interest – and likely to be the real winner of cargo diversions.

Hapag Lloyd, a major user of the Port of Montreal, has already confirmed its plans highlighting the nervousness of shipping lines. The operator announced: “With the risk of potential industrial action at the Port of Montreal, we expect that terminal performance in the port will be severely impacted.”

Canada’s National Statistics office, Statistics Canada, has estimated the cost of the impact of the strikes that occurred in 2020. The organisation reports that the cost to wholesales was almost C$630 million (US$500 million) in sales, while the Canadian Federation of Independent Business states that 40 per cent of small and medium businesses located in Quebec experienced a noticeable negative impact directly as a result of the strikes that occurred.

TIT-FOR-TAT

Tensions are continuing to escalate at the time of writing (midApril 2021). Montreal’s terminal employers have reportedly refused to pay longshoremen full salaries after an 11 per cent decrease in cargo in March 2021 due to cargo diversions. In return, the workforce is not undertaking any overtime shifts, working during weekends or undertaking any training activities.

The fear expressed by terminal employers is that the workers may deliberately undertake a “go-slow” and any employer response could see the situation further deteriorate. These concerns are already being seen, based on Hapag Lloyd’s latest announcement, which states that terminal operations at the port are configured on five days per week instead of the usual seven days.

“Slowdowns to vessel operations as well as rail handling are to be expected. Vessel schedules could be impacted by these delays. Hapag-Lloyd will continue to adjust operations in order to limit the impact to the schedule and our customers,” it says.

On this basis, expect more cargo to divert to Halifax. Canadian Manufacturers & Exporters (CME) continues to call on the federal government to intervene to resolve the situation. This association directly represents more than 2,500 companies who collectively account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.

In the Summer of 2020, the Canadian government refused to get involved, stating at the time that it had faith in the collective bargaining process. Well, that stance needs to change to ensure that this long-running issue is finally resolved, especially as pressure is being ramped-up by those most impacted – cargo shippers.