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Home » Impacts of the Montreal Port Strike on Ocean and Rail
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Impacts of the Montreal Port Strike on Ocean and Rail

Impacts of the Montreal Port Strike on Ocean and Rail
September 25, 2020
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Following a strike by dockworkers that lasted for one month and paralyzed operations at the Port of Montreal in August and September of this year, Resilience360 research indicates that major ports both on the west and east coast of Canada continue to experience disruption ranging from port congestion to rail car shortages.

“While the strike ended more than four weeks ago, ocean and rail dependent supply chain operations across Canada are unlikely to fully normalize before November 2020,” says Neža Kričaj, Supply Chain Risk Analyst, Resilience360. “Supply chain managers are therefore advised to adjust their routes and shipments accordingly, and explore options to divert cargo to alternative modes of transportation wherever possible.”

As a result of long-lasting tensions between dockworkers and port managers, the Canadian Union of Public Employees (CUPE) initially called a 4-day strike on July 27. After intermittent strike actions between July 31 and August 7, an indefinite strike was launched on August 10 that continued through August 21. Port operations were severely disrupted for a total of 28 days during the labor conflict. Throughout the strike period, ocean carriers diverted container ships to other ports including the Port of Saint-John and the Port of Halifax, resulting in larger-than-normal import volumes and causing berthing and yard congestion.

“As congestion issues at ports across Canada are likely to continue to affect ocean and rail dependent supply chains until October or November at some locations, supply chain managers are advised to continuously monitor congestion levels at their ports of interest and explore route adjustments where necessary,” continued Kričaj. “In some cases, shifting to alternative modes of transportation to reach destinations faster could be an option. At Montreal, some shippers are reportedly using truck delivery instead of rail to reach Toronto faster and terminals are also offering short-sea services to Toronto.”

On the east coast, large amounts of container backlogs continue to be cleared and port operations are expected to return to normal by the end of September or the beginning of October. In the aftermath of the strike, a container backlog of 11,500 units at the Port of Montreal initially forced some carriers, including Hapag-Lloyd, to suspend a first-in-first-out system due to limited space at Montreal container terminals. Rail operations were also severely impacted by cargo diverted to other eastern Canadian ports that caused rail car imbalances in the network.

At the ports of Saint John and Halifax, increased congestion has also been reported in recent weeks, with a limited availability of refrigerated and dry containers. As regular container services usually take priority over diverted ship calls, it can take several weeks to completely clear the additional volumes. While dwell times at the Port of Halifax have been improving in recent weeks, normal operations at the Port of Saint John are only expected from the second week of October as the port handled its last diverted vessel from Montreal on September 13.

The imbalance of rail cars in the network, coupled with large incoming volumes and labor shortages, have also caused severe congestion at ports on Canada’s west coast since last month. The rail car imbalance was partly caused by vessel diversions to east coast ports due to the strike at the Port of Montreal.

At the Port of Prince Rupert, vessels arriving from East Asia have been delayed by one week on average due to the lack of available labor and equipment capacities. While rail operations expect to add more trains by mid-September to reduce the current yard capacity utilization of 100 percent, additional manpower is only expected to be available by the end of September. Operations are therefore unlikely to normalize before November. The situation is reportedly similar at the Port of Vancouver. Yard capacity utilization has been running at 100 percent over the past weeks, with rail shortages and a crane removal project at the Centerm terminal exacerbating the congestion issues. Carriers expect the situation to normalize by October.

https://www.resilience360.dhl.com/news/month-long-port-strike-in-montreal-results-in-severe-congestion-and-rail-car-shortages/
Submit your logistics, material handling, or supply chain related company news in DC VELOCITY's Industry Press Room section or New Products section
Supply Chain Services Automatic Data Capture Global Logistics
KEYWORDS Resilience360
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