Canada railway negotiations halted – French port union partial strike – US East Coast port final contract delayed
Amidst the ongoing congestion in the global maritime container shipping market due to the impact of the Red Sea incident, major labor disputes in the logistics sector are emerging as a new threat to the supply chain.
The most recent strike issue in the global maritime shipping market is undoubtedly the concern over a strike by Canadian railway workers. Reflecting the market sentiment that a strike is a foregone conclusion, with only time remaining, both sides of the railway union are not backing down. Last week, a meeting between the Teamsters Canada Rail Conference (TCRC) and Canadian National Railway (CN) was reportedly aborted mid-meeting, with both sides refusing to even exchange views.
As is known, the railway union had planned a strike on May 22nd, but with government intervention, they are currently awaiting the results of the so-called essential service designation discussion by the Canada Industrial Relations Board (CIRB). Despite this, the hope that the issue would be resolved through negotiations between the two sides seems to have completely vanished after this meeting, according to local media.
In particular, the union stated in a press release last Friday, “Unfortunately, it was only after the first day of the meeting that we realized CN had no intention of discussing or considering our demands. Considering this reality, we decided not to continue with the remaining two meetings,” expressing their will that there would be no further negotiations.
Accordingly, market participants expect the union to proceed with a strike in some form, even if the CIRB’s decision (June 14th) is released.
Experts predict that the impact of the Canadian railway strike will affect ports across North America, and if the strike is prolonged, there are concerns that the global logistics crisis during the year-end peak season could be repeated.
In addition to the Canadian railway union issue, in Europe, French port unions have recently been facing a turbulent situation for the past month.
Workers at major French ports, including Le Havre and Marseille-Fos, are protesting the government’s retirement age and pension reforms, carrying out daily (24-hour) strikes before a full strike, emerging as a new issue in the market.
In particular, on June 7th, ro-ro, bulk, and container terminals in Le Havre were reportedly blocked by port workers, resulting in the first (partial) strike during the 24-hour strike, leading to the cancellation of four vessel calls and delays of 18 port calls.
Since then, the union has announced June 13th, 21st, and 25th as daily strike days and declared a 4-hour strike for three days each week. They are threatening to extend these disputes into July if there is no positive response from the government.
The impact of the French port s is immediately causing delays in port terminal bookings for road hauliers and forwarders, increasing costs such as warehouse storage fees. If shipping companies cancel more port calls, the impact on the logistics flow is expected to be significant.
Furthermore, a bigger problem is that the International Longshoremen’s Association (ILA), representing East Coast port unions in the United States, recently announced a halt in negotiations with the United States Maritime Alliance (USMX), citing the use of automation technology at some US ports.
The ILA claims to have discovered an automated gate system at the APM terminal in Alabama and suspects that the system may be in use elsewhere, leading to the announcement of a halt in talks.
According to local media, an ILA union spokesperson said on the same day, “Here we go again! This is another example of USMX member companies unilaterally bypassing the master contract across the US coast. This is a clear violation of the contract with USMX, and we will not tolerate it any longer.”
Automated gates allow for autonomous truck handling without labor, and if this is true, it would violate the current master contract, which is valid until September 30th, according to the union.
The master contract determines the six-year cycle for approximately 45,000 dockworkers at US East Coast and Gulf Coast ports. Harold Daggett, president of the ILA, has warned that union members will not work under the current contract after its expiration on September 31st, signaling a potential strike as early as October.
However, both sides recently released positive messages suggesting a possible agreement before the contract expiration date, giving the market hope for a positive outcome before September.
But with the reemergence of the automation issue and time running out until the current contract expires, the threat of a work stoppage is looming. Some US retailers are reportedly reviewing contingency plans in preparation for this possibility, indicating that the impact would be immediate.
In this regard, market experts analyze that geopolitical risks, along with economic trends such as interest rates and inflation, as well as climate crises and labor issues, will be the biggest factors threatening the global logistics supply chain market until the end of the year.
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